If the borrower defaults on the loan or otherwise fails to honor the terms of the agreement, the lender can seize and sell the collateral to recover the value of the loan only if the borrower agrees that it is unlikely that the loan will be repaid.

Question

Quizplus · Accepted Answer

The lender can seize and sell the collateral to recover the value of the loan even without the borrower's agreement if they default on the loan or fail to honor the terms of the agreement. This is because the collateral is security for the loan.

If the Borrower Defaults on the Loan or Otherwise Fails