Hypothecation

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Related to Hypothecation: hypothecation agreement

Hypothecation

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.

Hypothecate

To pledge an asset as collateral on a loan without the lender taking possession of the collateral. It especially applies to mortgages: the borrower hypothecates when he/she pledges the house as collateral for payment of the mortgage, or he/she may hypothecate the mortgage in order to borrow against the value of the house. In both situations the borrower retains the house, but the lender has the right to take possession if the borrower does not service the debt. Hypothecation also occurs in trading: a broker will allow an investor to borrow money to purchase securities with those securities as collateral. The investor owns the securities but the broker may take them if the debt is not serviced, or if the value of the securities falls below a certain level. See also: Foreclosure, Margin account.

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References in periodicals archive ?

This leads to proposals for new forms of funding for Australian content production, such as the hypothecation of the commercial broadcasters' licence fee rebates, and the expansion of the Producer Offset tax incentive to include a wider variety of genres.

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Tory council leader Mike Whitby accused Labour of 'hypothecation', claiming they should not assume they will be back next year.

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35 lacs and the loan would be secured against hypothecation of construction/mining equipment.

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The issue is secured by first pari passu charge on movable and immovable assets by way of equitable mortgage of immovable properties and hypothecation of movable assets with a 25% margin.

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The buyers of these securities have signed hypothecation agreements with their brokers that define a set of property rights.

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The tour operator hired 15 buses from Tata through methods of hire purchase and hypothecation over a period of four years.

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An example is the civil law provisions containing the right to take possession and the right of hypothecation. Even where such rights to take possession or hypothecate are conferred, care must be taken to ensure that legal norms are observed in the process.

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The answer to that, of course, is a set of entirely different questions about hypothecation and the strange rule-bound thing that is the UK economy.

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Some of the merits and demerits of hypothecation will be illustrated in the course of this article.

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In launching his campaign, Brennan singled out child endowment, the abolition of sales and payroll tax, government home loan guarantees, and the hypothecation of fuel taxes for roads.

The Democratic Labor Party: its vote, candidates and campaigns in the Riverina region 1957-1971

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