Blanket Encumbrance

Blanket Encumbrance


Blanket Encumbrance

A blanket loan, or blanket mortgage, is a type of loan that covers (i.e., blankets) more than one piece of real property. Blanket loans are popular with builders and developers who buy large tracts of land, then subdivide them to create many individual lots or parcels to be sold individually. Once a parcel or lot is sold that is encumbered by a blanket mortgage, the lot or parcel is released from the blanket mortgage, the balance of the loan is readjusted, and then redistributed against the remaining parcels.


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