cross-collateralization

cross-collateralization

The process of tying two or more mortgages together so that the security of one note stands as security for the other notes. A step often taken in a debt workout after default so that the creditor may enhance the amount of collateral available for a debt and also increase the hostage value of property, thereby discouraging any plans the debtor might have to simply turn in the keys and abandon mortgaged property to the creditor.