The recorded mortgage is what makes the property collateral for the note.  

That is, the property is given as collateral and memorialized in those documents.  

They have the right (after due process) to intervene and protect the underlying value of the asset since it is the collateral for the loan.  

@THU NGUYEN I had similar situation and currently working with a bank, who suggested on getting a business loan with SF property as collateral.

There are financial strategies that enable you to leverage your investments while diversifying them - for example, having $ in stocks and using that asset to collateralize a loan for real estate.

So each previous property is collateral for the next?

We come across a lot of real estate related situations where an investment properties serve as side collateral for a bigger transaction or people are looking for capital for a RE project.  

That said, I can confirm with 100% certainty that some community banks in this area will do Lines of credit using your real estate (commercial or otherwise) as collateral, including PFCU.

South State Bank might be worth speaking to, like any other bank, they want collateral though.

Yeah I thought there was something you could do with it as a type of collateral but clearly that is not the case.