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Hypothecation is the practice of pledging collateral in order to secure debt. This comes up most often in mortgage lending, but it can apply to any kind of debt. It shows up in investing, but ...
Here are answers to common hypothecation questions. What is an example of hypothecation? An example of hypothecation is the purchase of a car. When a borrower gets a car loan, the new car is ...
Hypothecation matters because it’s your formal agreement that if you fail to meet the conditions of the loan — such as making payments on your car or home — your property could get taken to ...
The word is a Law French term meaning "dead pledge," originally only referring to the Welsh mortgage (see below), but in the later Middle Ages was applied to all gages and reinterpreted by folk etymology to mean that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.
Hypothec (/ h aɪ ˈ p ɒ θ ɪ k, ˈ h aɪ p ɒ θ-/; German: Hypothek, French: hypothèque, from Lat. hypotheca, from Gk. ὑποθήκη: hypothēkē), sometimes tacit hypothec, is a term used in civil law systems (e.g. the law of most of Continental Europe) or to refer to a registered real security of a creditor over real estate, but under some jurisdictions it may additionally cover ships ...
One of the most common examples of a security interest is a mortgage: a person is loaned money from a bank to buy a house, and they grant a mortgage over the house so that if they default in repaying the loan, the bank can sell the house and apply the proceeds to the outstanding loan.
A pledge is a bailment that conveys title to property owned by a debtor (the pledgor) to a creditor (the pledgee) to secure repayment for some debt or obligation and to the mutual benefit of both parties. [1] [2] The term is also used to denote the property which constitutes the security. [3] The pledge is a type of security interest.
The mortgage (or deed of trust). This is the document that serves as security for the loan. ... For example, say you buy a house for $500,000 with a $100,000 down payment and a $400,000 mortgage ...