collateralization
Securing with property
Collateralization is the process of securing a loan or other financial obligation by pledging assets that the lender can seize if the borrower defaults.
A mortgage is collateralized by the house itself; a car loan by the vehicle.
In financial markets, collateralization reduces risk by ensuring creditors have recourse beyond the borrower's promise to pay: The bank required full collateralization before approving the loan.
Secured home loan
- lienClaim securing debt
- pledgeBinding promise given
- borrowerOne who takes temporarily
- lenderOne who loans money
default · foreclosure · repayment · principal · interest · refinance · amortization · covenant
Something owned or inherent
- equityImpartial treatment or ownership value
- valuationAssessment of monetary worth
- appraisalEstimation of worth
- titleFormal honorific or name
ownership · liquidation · recovery · leverage · haircut · mark-to-market · encumbrance · posting
Portion of grouped securities
- mortgage-backedBacked by home loans
- asset-backedSecured by underlying property
- derivativesThings derived from another
- obligationsRequired responsibilities
syndication · liquidity · subordination · swap · counterparty · pooling · waterfall · pass-through
Ability to repay debts
- ratingAssigned evaluative score
- exposureState of being unprotected
- mitigationReduction of severity
- hedgingNoncommittal maneuvering
insolvency · concentration · monitoring · triggers · early-warning · impairment
mortgage
Secured home loan
lender · default · foreclosure · repayment · principal · interest · refinance · amortization · covenant · guarantor
property
Something owned or inherent
- equityImpartial treatment or ownership value
- valuationAssessment of monetary worth
- appraisalEstimation of worth
title · ownership · liquidation · recovery · leverage · haircut · mark-to-market · encumbrance · posting · custodian
tranche
Portion of grouped securities
- mortgage-backedBacked by home loans
- asset-backedSecured by underlying property
- derivativesThings derived from another
obligations · syndication · liquidity · subordination · swap · counterparty · pooling · waterfall · pass-through · CDO
creditworthiness
Ability to repay debts
- ratingAssigned evaluative score
- exposureState of being unprotected
- mitigationReduction of severity
hedging · insolvency · concentration · monitoring · triggers · early-warning · impairment
collateralizationunsecured credit
Lending without pledged assets
unsecured debt · signature loan · uncollateralized · unsecured loan · personal loan
lateral, collateral, bilateral, unilateral, quadrilateral, multilateral, trilateral, collaterally, collaterals