Marine Finance and Lending
An unopposed Federal Court foreclosure of a
Preferred Ship Mortgage may easily cost $20,000 or more,
and this number will grow substantially if the vessel
owner or competing creditors step in to the process.
Today, most established lenders include a provision
in the language of the mortgage which allows for a "non-judicial" foreclosure,
thus saving time and money in the foreclosure process.
Under certain circumstances, however, the best course
of action may be to proceed under the watchful eye of
a federal judge and the Federal Court custodial process.
This analysis will of course vary on a case-by-case,
but problems invariably arise in the case of an unauthorized
liveaboard, or where multiple claims will be made against
the vessel. The mortgage is not always the senior lien,
and even where it has priority the competing claimants
may substantially reduce the value of the vessel at a
private sale or auction. Remember, only a Federal Court,
exercising its Admiralty Jurisdiction, may sell a vessel
free and clear of all liens.
Weil & Associates has worked with maritime lien
and mortgage issues for many years, and the firm has
been involved with countless vessel foreclosures. We
have also represented lenders in connection with construction
loans and other products that are subject to State law
rather than to Federal maritime law. We understand the
mechanics of vessel security interests and are frequently
able to advise clients of their best course of action
during our initial consultation. We look forward to working