obligation bond |
Definition
Debt instrument whose face value exceeds the market value of pledged (mortgaged) assets. In case of borrower default and lender's foreclosure on the property, the borrower is obligated to compensate the lender for all balances remaining after the assets are sold and the sales proceeds are applied toward the loan.
email to a friend
print this definition
cite this definition
link to this page
obligation bond is in the Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.
obligation bond appears in these other terms: moral obligation bond, general obligation bond, secured lease obligation bond (SLOB)
This content can be found on the following page:
http://www.businessdictionary.com/definition/obligation-bond.html