I like the idea. It's like the converse of the SALT Lending platform, where you use digital assets (stored in multi-sig contracts) as collateral to secure real world cash loans. This takes it a step further by allowing you to essentially tokenize anything to collateralize a loan.

One potential issue I see is whether these contracts will always be legally enforceable. I don't think we've seen much precedent in any court systems. In the case of your car above, how does the lender prove that the borrower agreed to forfeit his car, to the same extent as a wet signature on a contract? It sounds a bit more risky than a real world loan. Perhaps that risk would be reflected in the loan rates.