Hypothecation – When a person pledges a mortgage as collateral for a loan, it refers to the right that a banker has to liquidate goods if you fail to service a loan.

October 10, 2006 — Leave a comment

Hypothecation –  When a person pledges a mortgage as collateral for a loan, it refers to the right that a banker has to liquidate goods if you fail to service a loan. The term also applies to securities in a margin account used as collateral for money loaned from a brokerage

Notes:

You are said to “hypothecate” the mortgage.See also: Collateral, Loan, Mortgage, Pledged Asset, Rehypothecation Sources=Sources | 131072
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