HYPOTHECATION

Hypothecation

Hypothecation is the practice where a borrower pledges collateral to secure a debt or a borrower, as a condition precedent to a loan, has a third party pledge collateral for the borrower. The borrower retains ownership of the collateral, but the creditor has the right to seize possession if the borrower defaults. A common example occurs when a consumer enters into a mortgage agreement, in which the consumer's house becomes collateral until the mortgage loan is paid off.

The above text is a snippet from Wikipedia: Hypothecation
and as such is available under the Creative Commons Attribution/Share-Alike License.

hypothecation

Noun

  1. The use of property, or an existing mortgage, as security for a loan, etc.

Noun (etymology 2)

  1. A tax levied for a specific expenditure


The above text is a snippet from Wiktionary: hypothecation
and as such is available under the Creative Commons Attribution/Share-Alike License.

Need help with a clue?
Try your search in the crossword dictionary!