cross-collateralization


Also found in: Wikipedia.

cross-collateralization

The process of tying two or more mortgages together so that the security of one note stands as security for the other notes. A step often taken in a debt workout after default so that the creditor may enhance the amount of collateral available for a debt and also increase the hostage value of property, thereby discouraging any plans the debtor might have to simply turn in the keys and abandon mortgaged property to the creditor.

Mentioned in ?
References in periodicals archive ?
Last year, BMC closed over $ 100 million in finance deals, including the cross-collateralization of a highly leveraged loan at the newly built Hudson Yards project.
CROSS-COLLATERALIZATION STRENGTHENS PROGRAM: MFA's separate DWSRF and CWSRF programs are cross-collateralized with one another, which further enhances bondholder security by allowing for shortfalls in one program to be covered by surpluses in the other.
In addition, the representative ignored written supervisory procedures regarding funds transfers, prohibiting text message communications with clients without prior supervisory approval and cross-collateralization of margin loans.
We have yet to discuss forward swaps, cross-collateralization, cross-defaults, embedded swaps, mark-to-market valuations, or the twenty-eight page ISDA Master Agreement.
He was referring to cross-collateralization, where the collateral for one loan is also used as collateral for another loan.
SIFMA's request to expand PTE 80-26 was based on the widespread use of these types of indemnity and cross-collateralization clauses in many brokerage agreements.
These non-recourse loans are linked through a cross-collateralization and cross-default agreement.
Directing attention to the cross-collateralization of the various loans Finova made to Tower, the court said the original value of the Finova's collateral was not just the disputed aircraft engine but was all of the collateral that secured Finova's loans.
cross-collateralization clause would be meaningless.
And while the transaction involved liens on certain company assets and life insurance policies on the principals at Bentec, "there was no cross-collateralization with personal real estate," among the covenants that a bank might impose, Jumet says.
Cross-collateralization. Banks like to be very secure when lending by taking blanket liens on all assets.
If a lender is convinced about the merits of the borrower and the property, they have a number of lending methods, such as cross-collateralization, to proceed with the loan even at the lower appraised value.