chattel mortgage

A term used when describing a mobile or manufactured home mortgage. Specifically when the home is not financed with the land.

Investopedia Says:
These homes are commonly found in communities or parks.

Lien giving a lender a security interest in personal property, as opposed to real estate (land, buildings) pledged as collateral for repayment of a loan. Chattels can be any kind of movable property, such as automobiles, jewelry, and so on. A chattel mortgage is normally used in financing big-ticket consumer goods, such as household appliances; the lien terminates when the obligation is paid. See also Conditional Sales Contract.

A pledge of personal property as Security for a Debt.
Example: Abel borrows money against his automobile; the lender grants a chattel mortgage.

A mortgage of goods or personal property.

A security interest in a chattel as collateral for the payment of a loan.

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 Chattel mortgages have generally been superseded by other types of secured transactions under the Uniform Commercial Code (UCC), a body of law adopted by the states that governs commercial transactions.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.

See: recording of land titles.