Final answer:
A security deed or mortgage is the legal document used in Georgia to pledge property as collateral for loan repayment. Collateral serves as a lender's protection if the borrower does not repay, allowing the lender to seize and sell the property.
Step-by-step explanation:
In Georgia, the legal document that pledges the property as collateral for repayment of the loan is known as a security deed or mortgage. This practice is part of the financial capital market's risk management process, where a lender may require a borrower to offer valuable property, such as real estate, to secure the loan. If the borrower fails to repay the loan, the lender has the legal right to seize and sell the collateral. Sometimes, in addition to or in place of collateral, a lender might require a cosigner, another person or firm that legally pledges to repay the loan if the original borrower defaults.