Contracts
In NJ, a 'release clause' in a blanket mortgage allows a developer to:
ACancel the mortgage entirely
BSell individual lots and have each lot released from the mortgage upon paying the lender a specified release price✓ Correct
CTransfer the mortgage to a buyer
DReduce the interest rate as lots sell
Explanation
A release clause in a blanket mortgage enables a developer to sell individual parcels (lots) and have each released from the mortgage lien upon payment of a designated release price to the lender.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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