Preferred Mortgage Law and Legal Definition

Under 46 U.S.C.S. § 31322, a "preferred mortgage" is a mortgage that: (1) “includes the whole of the vessel; (2) is filed in substantial compliance with 46 U.S.C.S. § 31321 and (3) covers a documented vessel. To determine what type of property may be covered by a preferred ship mortgage, it is necessary to define what constitutes a vessel. Courts have interpreted that the term "vessel" includes its apparel and appurtenances.” In re HSF Holding, Inc., 2010 Bankr. LEXIS 54 (Bankr. D. Del. Jan. 13, 2010)