chattel mortgage

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Chattel Mortgage

A transfer of some legal or equitable right in Personal Property as security for the payment of money or performance of some other act. Chattel mortgages have generally been superseded by other types of Secured Transactions under the Uniform Commercial Code (UCC), a body of law adopted by the states that governs commercial transactions.

The rights of the lender who gives a chattel mortgage are valid only against others who know or should know of the lender's security interest in the property. Since the borrower possesses the property, others cannot realize that a chattel mortgage exists without notice. Each state, therefore, has developed a system for recording instruments showing the existence of chattel mortgages for particular items of property; these records are usually located in the county clerk's office.

If a recording system is in existence a buyer is presumed to know about a mortgage. Once, therefore, the mortgage is properly recorded, the buyer obtains the debt in addition to the property.


Recording of Land Titles.

chattel mortgage

n. an outmoded written document which made a chattel (tangible personal asset) security for a loan of a certain amount. It has been replaced in most states by a security agreement, the form of which is designated in a Uniform Commercial Code as UCC-1. These security agreements must be filed with a specific public agency (e.g. a state Secretary of State) to protect buyers of the personal property and lenders making loans secured by the property. (See: UCC-1)

chattel mortgage

(US) a mortgage on moveable personal property.
References in periodicals archive ?
In addition to this major restructuring of the Shasta County ranch obligation, Louis and Beth Joerger repeatedly utilized chattel mortgages with livestock and ranch equipment as collateral to secure short-term loans.
Does an all-in downpayment price mean inclusive of registration fees, chattel mortgage fees and insurance?
An online chattel mortgage registration system is also in the works, he said.
The All-In Package includes free three-year LTO Registration and one year comprehensive insurance and chattel mortgage.