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Hypothecation
By Contributor 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.
You need to know:
What lenders hope you never learn about mortgages
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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