When someone takes out a mortgage loan to buy a house,the mortgage lender can take possession of the house and sell it if the borrower defaults by failing to make payments on the loan because the house is being pledged as ________ for the loan.

Question

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Collateral is an asset or property that is pledged as security for a loan. In the case of a mortgage loan, the house being purchased is pledged as collateral for the loan. This means that if the borrower fails to make payments on the loan, the lender has the right to take possession of the house and sell it to recover the amount owed.

When Someone Takes Out a Mortgage Loan to Buy a House,the