A chattel mortgage occurs when an interest is given as a security on moveable property other than real property. It is in writing, an guarantees the payment of a debt or the satisfaction of some action. A chattel mortgage automatically becomes void after the debt is satisfied or the specified action is completed.

Mobile Homes are often purchased or refinanced with this type of loan.

A good example of a chattel loan is when someone buys a manufactured home that is located in a park. The land that the home rests on is leased. The title to the home is very similar to that of an automobile.

 

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