Blanket Mortgage Loan Law and Legal Definition

A blanket mortgage loan is a mortgage covering two or more pieces of real estate. In a blanket mortgage loan, the real estate is held as collateral on the mortgage. However, individual pieces of the real estate can be sold without retiring the entire mortgage. Usually, blanket loans are made to developers or contractors intending to purchase one or more tracts of land for dividing the land into smaller parcels. The purchase can be for resale or development.