What type of mortgage allows a mortgagee to collect rents once a default occurs?

The correct answer is based on the nature of the mortgage agreement that permits a mortgagee to collect rents when a default occurs. In a Usual Rent Assignment, the borrower assigns their rental income to the lender as security for the loan. This arrangement allows the lender (mortgagee) to step in and collect rents directly from tenants if the borrower defaults on the mortgage. This mechanism provides an additional layer of security for the lender, ensuring they have the means to recover some losses through rental income.

The other options don't offer the same provisions regarding the collection of rents upon default. For instance, while soft and hard lockbox arrangements deal with managing incoming payments and cash flow for a property, they do not inherently provide the mortgagee with the right to collect rents directly following a default. A standard mortgage typically does not include an explicit clause to collect rents upon delinquency but operates under more traditional terms. Thus, the Usual Rent Assignment is specifically designed to grant the mortgagee these collection rights, making it the correct choice in this context.