defeasance process


A process wherein a real estate is released from collateral by substituting it with a portfolio of U.S securities. Usually, a borrower purchases a portfolio of securities using the proceeds from the sale of real estate that once secured the loan. The yield from securities bought should cover the remaining payments of the original loan as defeasance does not extinguish the original obligation.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
defeasance clause defeased securities