What is the Defeasance Refund™ payment?
The nature of defeasance requirements and the securities portfolio often creates residual value within the Successor Borrower at loan maturity. The residual value is created through two sources. The first source is float income that accrues due to timing mismatches between the securities portfolio income and the regular loan payments. The second source of residual value comes from the borrower’s option to make penalty-free prepayments near the loan maturity date. Capital Defeasance Group is committed to the transparency of this residual value, including sharing this value with the borrower through a Defeasance RefundTM payment when appropriate.
