| Collateral |
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Property
or assets that is offered to secure a loan or other credit and that
becomes subject to seizure on default.
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A
form of security to the lender, in case the borrower fails to pay
back their loan.If you open a mortgage your collateral would be your
house. In some states the laws say that if you can't make payments
and the bank is force to seize the house then your house's value is
the remaining value on the mortgage. Meanwhile other places say that
once the house is sold then your mortgage is cleared.
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Dictionary
