Question

A release clause in a mortgage:"

a) provides for an option to extend its due date.
b) releases a guarantor from further liability under specified conditions.
c) when a part of a document, creates a lien second only to the lien of taxes and assessments.
d) allows portions of the property given as security to be released from the mortgage lien upon performance of specified acts.

Answer 1

In the financial capital market, a release clause in a mortgage allows portions of the property given as security to be released from the mortgage lien upon the performance of specified acts. The correct option is d) allows portions of the property given as security to be released from the mortgage lien upon the performance of specified acts.

Step-by-step explanation:

In the financial capital market, before a bank makes a loan, it requires a prospective borrower to fill out forms regarding income sources. In addition, the bank conducts a credit check on the individual's past borrowing.

Another approach is to require a cosigner on a loan; that is, another person or firm who legally pledges to repay some or all of the money if the original borrower does not do so.

Another approach is to require collateral, often property or equipment that the bank would have a right to seize and sell if the borrower does not repay the loan. The correct option is d) allows portions of the property given as security to be released from the mortgage lien upon the performance of specified acts.