Final answer:
The Defeasance Clause requires the lender to release the borrower from the mortgage lien once the mortgage is fully paid, which legally ends the borrower's obligation to the lender.
Step-by-step explanation:
The Defeasance Clause in a mortgage is a stipulation that requires the lender (mortgagee) to release the borrower (mortgagor) from the lien of the loan once the borrower has fully paid off the mortgage. This means that when the debt is repaid in full, the borrower’s obligation to the lender ends legally, and the lender must formalize this by executing a release document that frees the property from the claim of the mortgage.
The presence of a cosigner, which is another person or firm who legally pledges to repay some or all of the money on a loan if the original borrower does not, does not alter the responsibility of the lender to execute the Defeasance Clause. The term of a mortgage commonly spans either 15 years or 30 years, and understanding the role of the Defeasance Clause is crucial for the successful management of personal credit over such long periods.