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Simple English definitions for legal terms
no-setoff certificate
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A quick definition of no-setoff certificate:
A no-setoff certificate is a document that a borrower signs to acknowledge that their mortgage is valid for the full amount of the mortgage note. By signing this document, the borrower gives up any defenses they may have had against the mortgage. This document is also known as an estoppel certificate or a declaration of no defenses.
A more thorough explanation:
A no-setoff certificate is a legal document that acknowledges the validity of a mortgage for the full amount of the mortgage note. It is also known as an estoppel certificate or declaration of no defenses. This document ensures that the mortgagor has no defenses to the mortgage.
For example, if a person takes out a mortgage to buy a house, they may be required to sign a no-setoff certificate. This means that they acknowledge that the mortgage is valid and that they cannot use any defenses to avoid paying it back.
Another example is if a business takes out a loan and signs a no-setoff certificate. This means that they cannot use any defenses, such as claiming that the lender breached the loan agreement, to avoid paying back the loan.