Hypothecation | Propertylogy

Hypothecation

By on July 25, 2018

Hypothecation basically describes the situation whereby an asset is place as collateral for a debt while the borrower retain possession of the asset.

The lender will then have the legal right to seize the house via foreclosure should the borrower be unable to meet his debt obligations.

Hypothecation most commonly occur in mortgages.

The borrower gives a security interest in personal property to a lender while keeping possession of the house.



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