Alabama Real Estate Practice Exam

What does a partial release clause typically relate to?

1. Construction mortgages

2. Subprime mortgages

3. Sale-and-leaseback transactions

4. Blanket mortgages

The correct answer is: Blanket mortgages

A partial release clause typically relates to a blanket mortgage, which is a type of mortgage that covers multiple properties. This clause allows for individual properties to be released from the mortgage as they are sold, thus reducing the overall amount owed on the mortgage. Option A, construction mortgages, do not typically involve a partial release clause as the loan is used to fund the construction of a single property, rather than multiple properties. Option B, subprime mortgages, also do not typically involve a partial release clause as these types of mortgages are for borrowers with low credit scores and carry a higher risk of default. A partial release clause would not be beneficial in this case as the lender would want to maintain control over the borrower's assets. Option C, sale-and-leaseback transactions, also do not typically involve a partial release clause as this type of arrangement involves selling a property and leasing it back from the