Pledging assets against a loan using properties such as securities as collateral for a loan, but not transferring legal ownership to the lender. God help you, if you default on your repayments! The asset may be sold to realize its value
A pledge of property without delivering possession; for example, a mortgage.
Giving real or personal property as security without parting with possession.
The posting of collateral.
Borrowing funds from a lender, investing those funds in a debt instrument, and giving the lender a security interest in the debt instrument as the collateral for the loan.
The pledge of real estate as security without surrendering possession of the property.
The pledging of securities as collateral - for example, to secure the debit balance in a margin account.
A brokerage firm’s pledging of margin securities at a bank to secure the funds necessary to carry an account’s debit balance.
In banking, refers to the commitment of property to secure a loan. In securities, refers to the commitment of securities to serve as collateral for margin loans at the broker- dealer firm.
A hypothecation is an equitable charge on the goods without possession, but not amounting to a mortgage. The contract is done to secure a debt.
Pledging of securities to brokers as collateral for loans made to purchase securities or to cover short sales.
The original use of the word hypothecation was for a pledge of property as collateral for a debt without transfer of possession to the party making the loan. The arrangement is common with modern mortgages - the borrower retains legal ownership of the property but provides the lender with a lien over the the property until the debt is paid off.