Latest Articles


December 30, 2018

Blanket Mortgage

Word of the day

Blanket Mortgage

A mortgage secured by several properties or a number of lots. A blanket mortgage is often used to secure construction financing for proposed subdivisions or condominium development projects. The developer normally seeks to have a “partial release” clause inserted in the mortgage in order to obtain a release from the blanket mortgage for each lot as it is sold, according to a specified release schedule. For example, if a developer obtains a $500,000 mortgage to cover the development of 50 lots, he might be required to pay off $12,500 of principal to get each lot released from under the blanket mortgage. Sometimes, land developers have a “special recognition” clause put in the blanket mortgage whereby the lender agrees to recognize the rights of each individual parcel owner, even if the developer defaults and there is a foreclosure. Occasionally, the federal government secures a blanket lien against all properties owned by persons who have defaulted on their income taxes. 

A blanket mortgage may also be used when a purchaser buys a house plus an adjacent vacant lot and finances the purchase with a single mortgage that covers both properties. It may also be used where the equity in one property is insufficient to meet the lender’s requirements.

Related Post

Industry, Residential Real Estate, Education

Library of Real Estate Clauses

December 16, 2018

Brokerage, Technology, Consumer News, Residential Real Estate, Education, Misc

Short Sales and Tips for Newly Licensed Real Estate Agents

December 5, 2018

Brokerage, Consumer News, Residential Real Estate, Misc

Unilateral Contract VS Bilateral Contract

November 23, 2018

2021 Real Town The Real Estate Network