Financing, 9% of the examination
Hypothecation
Pledging property as security for a debt without giving up possession of it.
This is exactly what a borrower does when giving a deed of trust and continuing to live in the house. It is the core idea that allows real property to secure debt at all.
Test the distinction
A relevant question from Financing, selected because its facts or explanation use this concept.
Financing ยท 9%General Concepts
What is hypothecation?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
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