uscg vessel documentation

The First Preferred Ship's Mortgage

A First Preferred Ship's Mortgage is a mortgage recorded against a vessel documented with the United States Coast Guard. It is protected under the Ship's Mortgage Act of 1920, and takes precedence over all liens other than preferred Maritime Liens. The First Preferred Ship's Mortgage secures not only the note described, but also any future extensions or advances against the vessel.

As Mortagee of the vessel you may withhold disbursing of the funds until the documentation agent has received all papers necessary to file the First Preferred Ship's Mortgage and have the right to see all papers pertaining to the vessel. You may also require, from time to time, additional statements from the owner to further guarantee the security of the note. If you feel a change in the borrower's financial position endangers the debt, you have the ability to call the note.

The First Preferred Ship's Mortgage assures the mortgagee the owner will properly insure the vessel and refrain from encumbering the vessel. The mortgagee will be notified if the vessel is seized, libeled, or detained by any person or country within 15 days and discharge it from same. With the First Preferred Ship's Mortgage, the owner will comply with all state, local, and U.S. laws and keep vessel document current and on board the vessel, along with a copy of the Mortgage. The mortgage is assured the owner will not leave the country without intending to return, abandon the vessel or sell, mortgage, or charter the vessel without the consent of the mortgagee