Final answer:
Leo is taking out a mortgage to purchase a house. The mortgage gives the lender a security interest in the property as a guarantee against the loan. This is not a down payment, a short sale, or predatory lending.
Step-by-step explanation:
The terms of the loan described suggest that Leo is engaged in securing a mortgage for his house purchase. In this arrangement, the bank extends a loan to the borrower, which is used to finance the purchase of property, and in return, the bank receives a security interest in the property. This security interest means that if Leo fails to fulfill his payment obligations, the bank has the right to take possession of the property in question.
A down payment is typically a portion of the property's purchase price that the borrower pays upfront, which is not the focus of this scenario. A short sale refers to selling the property for less than the amount owed, which is irrelevant here. Consequently, predatory lending refers to unethical practices by lenders, like charging high interest rates or approving loans for borrowers unlikely to repay, which is not indicated by the information provided.