What clause permits release of individual properties from a blanket mortgage?

• A. Acceleration clause
• B. Due-on-sale clause
• C. Partial release clause
• D. Prepayment clause

Answer: (C)

In a blanket mortgage that covers multiple parcels, there’s a specific provision that lets the lender release one property from the lien while the rest stay encumbered. This is the partial release clause. It allows the borrower to have a single parcel freed from the mortgage once certain conditions are met—typically paying down a portion of the loan proportional to the released property, sometimes providing current property value via appraisal, and covering any closing costs. Once released, that parcel can be sold or refinanced, without needing to pay off the entire loan or disturb the remaining properties.

Other clauses serve different purposes. An acceleration clause kicks in when there’s a default and demands repayment of the entire loan, not freeing individual parcels. A due-on-sale clause requires full repayment if ownership changes, again not about releasing a specific property. A prepayment clause simply governs paying off the loan early and doesn’t authorize releasing part of the collateral.