The defeasance clause in a mortgage requires that the mortgagee execute what?

The defeasance clause in a mortgage is a provision that requires the mortgagee, or lender, to release a borrower from their mortgage obligation upon payment of the debt in full. When the borrower pays off the loan, the mortgagee must execute a satisfaction of mortgage, which is a legal document that verifies the loan has been fully paid and releases the lien on the property.

This satisfaction of mortgage serves as confirmation that the borrower has fulfilled their financial obligations and the mortgage is no longer in effect. It is vital for the borrower to receive this document so they can prove ownership free of the mortgage lien.

Other options do not fulfill this specific function: a foreclosure action refers to a legal process where the lender seeks to reclaim the property due to non-payment; a mortgage assumption involves another party taking over the mortgage but does not relate to satisfaction; and a deed in lieu of foreclosure is a transfer of property back to the lender in lieu of foreclosure but does not address the release of the mortgage after full payment. Therefore, the satisfaction of mortgage is the correct answer related to the requirements of the defeasance clause.