Question

A mortgage broker looking to purchase new computer equipment establishes a collateral assignment with a bank using a $220,000 mortgage loan on single family home as the collateral. What happens if the mortgage broker defaults on the loan that comes from the collateral assignment?

Answer 1

If a mortgage broker defaults on a loan secured by a collateral assignment, the bank can seize and sell the collateral, which in this case is a single-family home. The broker may still be responsible for any remaining balance on the loan.

Step-by-step explanation:

When a mortgage broker defaults on a loan that comes from a collateral assignment, the bank has the right to seize and sell the collateral. In this case, the collateral is the single-family home that was used to secure the loan. The bank will take possession of the property and sell it in order to recover the amount owed on the loan. If the proceeds from the sale are not enough to cover the loan amount, the mortgage broker may still be responsible for paying the remaining balance.