That just doesn't happen. Either the lendor is happy with an uncollateralized loan, a significantly but partially collateralised loan (such as 50%) or a fully collateralised loan. And in each of those cases the lender knows exactly how much he thinks the collateral is worth. If the collateral doesn't cover the loan, there is a written agreement between both parties stating so. The borrower would be wise to use that as evidence, since it reduces his taxable gains. Otherwise it's assumed the collateral covers the loan. No need to do anything special.