Which statement best describes a blanket mortgage?

Which statement best describes a blanket mortgage?

• A. It secures real estate and personal property under one lien
• B. It is used only for commercial properties
• C. It encumbers multiple properties as collateral
• D. It is a loan secured by a single property

Answer: (C)

A blanket mortgage is a loan that covers multiple properties under one lien, using all those properties as collateral. This setup is common when a developer or investor wants to finance a portfolio of parcels with a single loan and then release individual properties from the lien as they are sold. That ability to encumber several properties with one loan is the defining feature, which is why describing it as encumbering multiple properties as collateral is the best fit. The other ideas don’t fit as well: it doesn’t typically involve personal property, it isn’t limited to commercial properties, and it isn’t a loan secured by just a single property.

A blanket mortgage is a loan that covers multiple properties under one lien, using all those properties as collateral. This setup is common when a developer or investor wants to finance a portfolio of parcels with a single loan and then release individual properties from the lien as they are sold. That ability to encumber several properties with one loan is the defining feature, which is why describing it as encumbering multiple properties as collateral is the best fit.

The other ideas don’t fit as well: it doesn’t typically involve personal property, it isn’t limited to commercial properties, and it isn’t a loan secured by just a single property.