Hypothecation

What Does It Mean?
What Does Hypothecation Mean?
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.
Investopedia Says
Investopedia explains Hypothecation
You are said to "hypothecate" the mortgage when you pledge it as collateral for a loan.
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