Answer: Prepayment penalty

**Explanation:** - **Option A (Non-recourse loan):** Incorrect. In a non-recourse loan, the lender can only recover the outstanding mortgage balance from the property itself, without any claim against the borrower for any shortfall. This limits the lender's recourse and does not benefit them. - **Option B (Prepayment option):** Incorrect. A prepayment option allows the borrower to repay the mortgage principal before the scheduled due date. This benefits the borrower by providing flexibility, but it introduces uncertainty for the lender regarding cash flow timing and amount. - **Option C (Prepayment penalty):** Correct. A prepayment penalty compensates the lender for the difference between the contract rate and the prevailing mortgage rate if the borrower prepays during a period of declining interest rates. This feature protects the lender's expected returns and is advantageous to them.

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