What is the process of using real estate as collateral for a loan called?

The process of using real estate as collateral for a loan is called hypothecation. This term specifically refers to the practice of pledging property as security for a loan while retaining ownership of that property. In a hypothecation arrangement, the borrower continues to have rights to use and occupy the property, but the lender holds a legal claim against the property as security until the loan is repaid. This is a common practice in the real estate and lending industries, as it provides lenders with assurance that they can recover their investment if the borrower defaults.

In contrast, collateralization refers more generally to the act of securing a loan with any kind of asset, not necessarily real estate, and might involve different types of collateral such as personal property or financial instruments. Securing is a broader term that may not specifically indicate the use of property as collateral for a loan, while equitization usually refers to converting assets into equity or capital, rather than the process of using them as collateral.