How could an enslaved person be mortgaged or used as collateral?

This needs a historical qualification.

In slave societies, enslaved people were legally treated as property in ways that could give them monetary value.

That meant slaveholders could sometimes use enslaved people as security for financial obligations.

For example, imagine:

A slaveholder wants to borrow $10,000.

The lender wants security in case the loan is not repaid.

The slaveholder has:

• land,
• livestock,
• buildings,
• and enslaved people.

Depending on the legal and financial arrangements of the jurisdiction, enslaved people could be included among the assets securing debts.

If the debtor defaulted, the property securing the debt could be seized or sold.

So “used as collateral” means:

the enslaved person was treated as an economically valuable asset that could help secure the owner's debt.

This is one of the clearest ways in which the legal status of enslaved people as property affected the financial system.