Explaining Underwater Loans
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Feel like you're drowning in debt? It may be because your loans have gone underwater.
Collateral is property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses.
A mortgage is a loan used to purchase a home, where the property serves as the borrower's collateral.
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