Veðsetja

Veðsetja is an Icelandic verb meaning to pledge something as security for a loan or other obligation; to mortgage or collateralize. The related noun veðsetning refers to the act or arrangement of placing a lien or mortgage on property to secure an obligation.

Etymology: The word is a compound of veð, meaning security or pledge, and setja, meaning to place. It has been used in Icelandic to describe securing a debt by offering property as collateral.

Usage and legal context: In financial and legal contexts, veðsetning creates a security interest in an asset, most commonly real estate but also movable property or rights. When a borrower veðsetur property, the lender obtains a lien that can be enforced if the debt is not repaid. In Iceland, such security is typically registered in the land registry (þinglýsing) to be effective against third parties. The party who lends is the veðhafi (the mortgagee) and the borrower is the veðsetjandi (the mortgagor). If the debt remains unpaid, the lender may enforce the mortgage by selling the secured property.

Examples: Húsið var veðsetið til að tryggja lánið. The loan was secured by mortgaging the house.

See also: veð, veðsetning, veðhafi, þinglýsing, veðskuld.