What clause is commonly associated with a blanket mortgage?

A release clause is commonly associated with a blanket mortgage because it allows for the partial release of properties from the mortgage obligation. In a blanket mortgage, multiple properties are often used as collateral for a single loan. As individual properties are sold or refinanced, the release clause provides a mechanism for those specific properties to be removed from the blanket mortgage without disturbing the remaining properties that continue under the mortgage.

This feature is crucial for developers or investors who may need to sell certain assets while retaining financing on others. The release clause essentially facilitates flexibility in managing a portfolio of properties under one mortgage agreement, which can be advantageous for cash flow and financial management.

The other clauses mentioned do not typically serve this specific function. A buyback clause relates to contractual obligations to repurchase items or securities, often seen in investment scenarios. A prepayment clause deals with the terms surrounding paying off a loan early and any penalties or fees that may be assessed. A default clause outlines the conditions under which the lender can take action if the borrower fails to meet their mortgage obligations. None of these clauses address the operational needs of managing multiple properties under a single loan as effectively as a release clause does.