Hypothecation
"Even though people are now more aware of what’s going on in the financial industry, the question is are they doing enough to protect their assets from being ‘hypothecated’, like in the case of MF Global.
Hypothecation is the practice where a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral, but it is "hypothetically" controlled by the creditor in that he has the right to seize possession if the borrower defaults. A common example occurs when a consumer enters into a mortgage agreement, in which the consumer's house becomes collateral until the mortgage loan is paid off."
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