Escrow & TitleIntermediateArizona Exam

In Arizona, a 'partial release clause' in a blanket mortgage allows the borrower to:

AMake additional principal payments above the scheduled amount to reduce the outstanding balance and eventually qualify for early full release of the blanket lien
BRelease individual parcels from the blanket mortgage lien by paying a specified portion of the loanCorrect
CRelease the entire blanket mortgage lien by substituting alternative collateral of equivalent value without paying any portion of the outstanding loan balance
DTransfer a specified portion of the outstanding mortgage obligation to a new lender who assumes responsibility for the corresponding percentage of the underlying debt

Why Release individual parcels from the blanket mortgage lien by paying a specified portion of the loan Is Correct

Answer B: Release individual parcels from the blanket mortgage lien by paying a specified portion of the loan

A partial release clause allows a developer with a blanket mortgage to release individual lots from the lien by paying a specified release price, freeing each lot to be sold with clear title as the development is completed.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

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