Description

Defeasance is the process of releasing a property from a mortgage lien before the loan term is up. Instead of paying off the loan with a lump sum of money, the borrower replaces the collateral backing the loan with other securities, usually government bonds. These bonds generate enough income to cover the remaining loan payments. However, there is a defeasance prepayment penalty, which compensates the lender for the loss of expected interest income. The penalty is calculated based on factors such as the current interest rate environment and the remaining balance of the loan.

Takeaways

1. Defeasance is a way to release a property from a mortgage lien before the loan term is up.
2. Instead of paying off the loan with a lump sum of money, the borrower replaces the collateral with other securities, usually government bonds.
3. The bonds generate enough income to cover the remaining loan payments.
4. There is a defeasance prepayment penalty to compensate the lender for the loss of expected interest income.
5. The penalty is calculated based on factors such as the current interest rate environment and the remaining balance of the loan.

Chapters

00:00 Understanding Defeasance: Rendering Loans Null and Void

01:48 Navigating Defeasance: Releasing Property from Mortgage Lien

03:11 Defeasance Prepayment Penalty: Compensating for Early Loan Payoff

🔋 Support My Channel 🔋

Bitcoin: bc1pe8ejjypqem83tupwurs68jlchwsh0889mfjgpxss7xentgcfwkpstv5y2h

Sats via Strike: https://strike.me/tanh

Dollars via Paypal: https://www.paypal.com/paypalme/tanht

Dollars via Venmo: https://account.venmo.com/u/tanh-truong

🌍 Website: https://www.wontonwealth.com

✖️ X: http://www.x.com/tanhtruong

📷 IG: http://www.instagram.com/pro_tanh

🤓 LinkedIn: http://www.linkedin.com/in/tanh-truong-30a18ab0/

❗ DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by Wonton Wealth. Written permission must be granted before syndication or rebroadcasting.