Roundwell motors purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from home providence bank. to secure the loan, roundwell gives the plant as collateral to home providence bank. if roundwell defaults on their payment, what is the recourse available to home providence to recover the loan?

Question

Jayce Randolph

Business

27 November, 12:36

Roundwell motors purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from home providence bank. to secure the loan, roundwell gives the plant as collateral to home providence bank. if roundwell defaults on their payment, what is the recourse available to home providence to recover the loan?

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Answers (1)

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Noelle Rivers · Answer 1

A mortgage is the resource available to home providence to recover the loan.

A mortgage is defined as a legal agree between a bank/creditor with a a person or business. They lend money with an interest rate in exchange for having full ownership of the persons title (house/business building) if the person does not pay.