Chattel
Categories: Regulations
The world of loan collateral consists of assets that are immovable, such as real estate land or building structures, and those that are movable, such as vehicles, jewelry, livestock, or other items. All of the latter are legally termed “chattel,” and are referenced under chattel mortgages.
Chattel mortgages define collateral value for the assets in question, along with depreciation rates, loss penalties, repo or liquidation, and other terms and risks that can apply which would be different from those in real estate.
Technically, loans in which artwork, mobile homes, musical instruments, vehicles, cattle herds, and the like are pledged as collateral are all categorized legally as chattel mortgages. Recreational drugs, due to their low temptation threshold, probably would just constitute a sale item rather than a recoverable collateral asset.