0
Hypothecation is the practice of a borrower pledging an asset as collateral for a loan while retaining ownership of the assets and enjoying the benefits therefrom. The lender has the right to take possession of the asset if the borrower defaults. An example would be a mortgage. The transaction is memorialized in a note and mortgage document evidence of which is recorded in the land records. That recorded evidence constitutes a lien on the property. The lien is released when the debt is paid.
Wiki User
∙ 9y ago
Add your answer:
Earn +20 pts
What are the imp mode of creating charge on secured loan advances?
Lien, Pledge, Hypothecation and Mortgage are the four main modes of creating security....
What is difference pledge and hypothecation?
A pledge usually has no legal inclination whereas hypothecation has legal consequences in the event you fail to honor your word.
In taxation hypothecation meaning directing specific taxes to specific purposes What does it mean in banking?
Pledging stocks as collateral for a loan
Is Illinois a lien or a title theory state?
Indiana is a lien theory state.Indiana is a lien theory state.Indiana is a lien theory state.Indiana is a lien theory state.
Can you have a lien put on someones own home if they owe monies from another job site?
Mechanic's lien- no.Mechanic's lien- no.Mechanic's lien- no.Mechanic's lien- no.
What is the difference between a transfer of lien and release of lien?
A transfer of lien assigns the lien claimant's position in the lien to another party. A release of lien discharges the lien and makes it not appear on a title policy issued for the property.
What is difference between mortgage and hypothecation?
Hypothecation is to pledge personal property, or a ship, as security for a debt without transferring possession or title.A mortgage is a loan secured by real property. A person who grants a mortgage either transfers title to the lender or permits a voluntary lien on the property. Hypothecation Last modified on 24 May 2012 at 18:11A Hypothecation is a charge, which is resorted to by the borrower, where transfer of possession of property from the borrower to the banker or creditor is either impracticable or inconveinient. In other words, the borrower retains the ownership of the security or collateral pledged to the banker. Possession remains witht the borrower, but the ownership of the property remains with the banker till the loan is closed in full.For example, when a borrower takes a bank loan to purchase a laptop or colour TV, an equitable charge, known as hypothecation, is created in favour of the banker. Here, though the possession of the laptop and the TV will be with the borrower, the ownership remains with the banker till the entire loan is closed. In other words, it is "hypothetically" controlled by the banker or creditor who has the right to seize possession of the goods secured to him when the borrower defaults in making payment of the loan.A mortgage is the transfer of interest in a specific immovable property by one person to another for the purpose of securing a loan or advance of money. The person who transfers the interest in a specific immovable property is known as the mortgagor and the person to whom it is transferred is called the mortgagee. The instrument or the note through which the mortgage is effected is called mortgage deed.The main point to be noted is that, in a mortgage, the mortgaged property is not transferred to the mortgagee. It usually remains with the borrower or mortgagor. Only interest in the mortgaged property is transferred from the mortgagor (borrower) to the mortgagee (the banker).On repayment of the loan, the interest in the property is re-transferred to the mortgagor (borrower). However, when the borrower fails to repay the loan dues, the mortgagee (banker) gets the right to sell the property and recover his loan dues from the sale proceeds of the property.The differences between a hypothecation and a mortgage is as follows:1. A Hypothecation refers to a movable property, whereas a mortgage generally refers to an immovable property.2. A hypothecation can be created without executing a document. But for creating a mortgage, documents have to be executed.3. In a hypothecation legal interest is not transferred to the creditor (banker) whereas, in a mortgage, legal interest in the mortgaged property is transferred to the creditor (banker).M.J. SUBRAMANYAM, XCHANGING, BANGALORE
What is an involuntary lien against my property?
An involuntary lien would be a judgment lien by a creditor, a lien for unpaid property taxes or income taxes, a demolition lien, a lien for unpaid common expenses or homeowners association dues or a mechanic's lien. Contrast that with a lien you granted in your property such as a mortgage which would be a voluntary lien.
Can a junior lien supersede a senior lien?
A junior lien can supersede a senior lien only if the senior lienor subordinated their lien in writing and recorded in the land records.A junior lien can supersede a senior lien only if the senior lienor subordinated their lien in writing and recorded in the land records.A junior lien can supersede a senior lien only if the senior lienor subordinated their lien in writing and recorded in the land records.A junior lien can supersede a senior lien only if the senior lienor subordinated their lien in writing and recorded in the land records.
How do you spell lien?
lien
IS THERE A LIEN ON IT?
is there a lien on this car
what is this lien for?
what is this tax lien for
