Hypothecation Agreement Shares

In both cases, unlike consumer or business financing, the borrower is usually not in possession of the securities, as they are in accounts controlled by the broker, but the borrower still retains legal ownership. This is also important in the world of investment. Remember that the mortgage is to invest when an investor buys securities on the margin. In this agreement, they can sell these securities in case of Margin Call. They can also cover losses by selling other assets on the brokerage account. This means that the mortgage when investing carries some risk. In an order, you intend to transfer the asset to another owner. In the mortgage, your intention is to secure the asset to secure a loan. What`s important is that you plan to retain ownership of the sloppy asset after paying off the loan. In both cases, ownership remains in the hands of the borrower, but mortgages are generally non-movable assets, while pledging applies to movable assets. Common examples are mortgage mortgage and vehicle credit in case of mortgage.

To learn more about the differences: mortgage-V/s-mortgage If you are interested, you can read this real example of a mortgage agreement. One lender uses collateral from a borrower, then another lender uses those remortged collaterals and so on…