Abstracts, Liens & Mortgages

What an Abstract of Title is

An Abstract of Title is a report of instruments recorded against a documented vessel with the U.S. Coast Guard. It generally reflects recorded ownership filings, Preferred Ship Mortgages, and notices of claim of lien, with dates.

It is a record of filings. If something was never filed, it will not appear — and if something was filed and never released, it will appear indefinitely.

What a Preferred Ship Mortgage is

A Preferred Ship Mortgage is a mortgage recorded against a documented vessel under federal law. Recording gives the lender a recorded interest in the vessel itself, which is why marine lenders use it.

Why an old mortgage still shows

When no satisfaction or release was ever recorded, the mortgage remains on the abstract — sometimes for decades, through multiple owners who never knew it was there. It usually surfaces at the worst possible moment: when a new buyer's lender orders an abstract.

Getting a release when the lender has changed hands

Banks merge and get acquired. The institution named on a 1998 mortgage may not exist today under that name. Before a release can be accepted, the chain from the original mortgagee to the current institution generally has to be established, and the release must come from a party with authority to give it. This is often the single slowest item in an otherwise simple transaction — see why USCG documentation gets delayed.

Claims of lien

Notices of claim of lien can also appear on a vessel's record — for example, from parties claiming amounts owed in connection with the vessel. Whether and how a claim affects a transaction depends on the facts, and legal questions about a lien's validity are matters for an attorney.

State records are separate

A state title record can show its own lienholders. A vessel can therefore have a federal record and a state record that do not tell the same story. Both should be reviewed.

What to do with this information

• Order an abstract early — before a deposit is at risk if possible.
• Read every entry, including old ones, not just the current owner line.
• Match the owners of record against the people who will actually sign.
• Identify each encumbrance and who must release it.
• Start release requests immediately; they depend on third parties.