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A preferred ship mortgage is a mortgage that is given status as a maritime lien with the Coast Guard. As such, it enjoys a certain priority in the event of default. In addition, the Coast Guard is prohibited from making certain changes in documentation, including, but not limited to, change of vessel ownership, name, and hailing port without consent of the mortgagee. For this reason, many financial institutions require vessels, which are eligible for documentation, to be documented and to have preferred mortgages recorded against them.

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