|
Hypothecate
To give property as security without relinquishing ownership
of said property. A mortgage is a good example of a hypothecation.
Most mortgage schools say 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 property until the debt is paid off.
| 
