Coast Guard Red Tape Woes

Jun 7, 2016
315
Catalina C30 Warwick, RI
So a few weeks ago I got a letter from the Coast Guard; I was excited thinking it was my documentation transfer coming in BUT, it was a letter saying that there was a problem with transferring the documentation. Apparently they have a record that there was a mortgage on the boat from when it was originally purchased in 1984 but they do not have a record that it was paid off.

I bought the boat off of the original owner (whom is also a family friend) and the boat was paid off sometime in the 90's. He does not still have the letter saying it was paid off, and Hanover Trust who the loan was through no longer exists. I found out Hanover was bought out by JP Morgan/Chase. I called Chase 2 weeks ago and they were very pleasant, I explained the situation, they took all my and the boats info and said they would mail something out to me. I just called them again today and they stated they are still researching the HIN number and loan trying to find the records. They told me to call back in a week to check in.

Has anyone run into something like this before and how did you work it out?

and/or

Does anyone know of another avenue I can take to prove to the Coast Guard that the boat does not have an outstanding lien so I can get it documented?
 
Jan 11, 2014
11,321
Sabre 362 113 Fair Haven, NY
Is there also a state title? If so, the title may be clean without any liens on it.

Perhaps a letter from JPM Bank indicating that they have acquired the assets of Hanover and they have no record of a lien on the boat.

Finally, it may be worth while to hire a Documentation agency to handle this. Not one of those Documentation renewal businesses. One of the ones that banks make you use when you have a loan on the boat. I may still have some info at home on the one I used.
 
  • Like
Likes: ontherocks83
Jan 19, 2010
12,362
Hobie 16 & Rhodes 22 Skeeter Charleston
JPM should be willing to write you a notarized letter stating that they no longer have any interest in your boat. It would not be hard for them to do this. If they cannot find the records, they obviously are no longer interested. Call JPM back, and if they still put you off, explain that it has already been a reasonable amount of time and ask if they would be willing to write you this letter. You don't want to get ugly but you are experiencing actual damages and need their assistance. You might talk to the Coast Guard and ask if that letter would suffice. If they say yes, that should give you a little social capital with whomever you are talking with at JPM.

I also like @dlochner 's suggestion to talk to a documentation agency but I'm sure that will cost several boat bucks.
 
Jun 7, 2016
315
Catalina C30 Warwick, RI
JPM should be willing to write you a notarized letter stating that they no longer have any interest in your boat. It would not be hard for them to do this. If they cannot find the records, they obviously are no longer interested. Call JPM back, and if they still put you off, explain that it has already been a reasonable amount of time and ask if they would be willing to write you this letter. You don't want to get ugly but you are experiencing actual damages and need their assistance. You might talk to the Coast Guard and ask if that letter would suffice. If they say yes, that should give you a little social capital with whomever you are talking with at JPM.

I also like @dlochner 's suggestion to talk to a documentation agency but I'm sure that will cost several boat bucks.
When I call back next week I will start to push harder on JPM to give me something.

As far as the calling the CG goes is where it gets interesting. I called the West Virginia office twice where they process everything. The first time was asking about how to obtain the payoff letter and they were intentionally very vague/ non-committal saying they need a letter but would not tell me anything else except it was on me to get it.

I then called back a while later after talking to JPM and got the very same person, so I am assuming it is a small office. Not wanting to make enemies especially if everything runs through this person, I asked if a certain type of letter would suffice and the only answer I could get was "we can't tell you until we see it" Basically the idea of, we need a Unicorn and can't proceed without said Unicorn, But you have to find it all on your own and it better be the "right" unicorn. Which one is the right unicorn? Oh we can't tell you that, but make sure it is the right one.

Obviously I'm being a bit inflammatory but that was the general gist/feeling of the conversation.
 
Jan 11, 2014
11,321
Sabre 362 113 Fair Haven, NY
The Satisfaction of Lien form looks like this one from the NVDC website.


The form needs to be completed by the lien holder and filed by the lien holder. Just went through this with our bank as we paid off the loan on Second Star. (Yahoo!)

When I get home, I'll look for contact information for the documentation service I used. Having a third party who works with this every day may be helpful. The cost wasn't that great, a few hundred dollars over the CG fees.
 

capta

.
Jun 4, 2009
4,766
Pearson 530 Admiralty Bay, Bequia SVG
This is why I suggest folks use a broker or documentation service when they buy a boat.
The USCG has a looong memory and is very inflexible about this. I (and my crew) put a lien on a commercial vessel when the company went bust and about 6 years later I was contacted because someone wanted to buy the vessel and our lien showed up. The purchaser had no involvement in our dispute but was still responsible for the debt, if they wanted to buy the boat. Being the nice guy I am (LOL), I let them off the hook, but the money sure would have been useful.
You may have to settle for state registration while this gets sorted out, if you are using the boat.
I would suggest you send (email and snail mail) the actual USCG satisfaction of lien form to JPM (get the name of whomever you are dealing) as it being on someone's desk will be a reminder that this needs attention.
Sorry to say this, but I highly recommend you do not let your emotions get out of control with either the CG or JPM as neither has any obligation to help you. In a situation like this, just try to enjoy jumping through hoops because you have absolutely no other choice if you want to get this done.
 
Last edited:

Tom J

.
Sep 30, 2008
2,301
Catalina 310 Quincy, MA
The Satisfaction of Lien form looks like this one from the NVDC website.


The form needs to be completed by the lien holder and filed by the lien holder. Just went through this with our bank as we paid off the loan on Second Star. (Yahoo!)

When I get home, I'll look for contact information for the documentation service I used. Having a third party who works with this every day may be helpful. The cost wasn't that great, a few hundred dollars over the CG fees.
Thanks for the information. My mortgage will be paid off this year, so this info will be very helpful. It is interesting to note that when I bought the boat, we had a closing, and the loan was referred to as a mortgage by everyone, including the bank. Years later, I called the bank about refinancing the mortgage at a lower rate, and the person I spoke to said they don't do mortgages on boats, they only do boat loans.:banghead:
 
  • Like
Likes: tfox2069
Jan 11, 2014
11,321
Sabre 362 113 Fair Haven, NY
Thanks for the information. My mortgage will be paid off this year, so this info will be very helpful. It is interesting to note that when I bought the boat, we had a closing, and the loan was referred to as a mortgage by everyone, including the bank. Years later, I called the bank about refinancing the mortgage at a lower rate, and the person I spoke to said they don't do mortgages on boats, they only do boat loans.:banghead:
The full name is "Ship's Preferred Mortgage."
 
  • Like
Likes: Tom J
Jan 11, 2014
11,321
Sabre 362 113 Fair Haven, NY
The documentation service I used was All Yachts Registries. Even if you are not going to use their services, there is a lot of good information on their site. I'd give them a call and ask for their advice and if they can help you.

 
Jan 22, 2008
8,050
Beneteau 323 Annapolis MD
It sounds to me ike the CG only needs any letter from a financial institute to cover their butt. I think the letter would say the company "no longer has" any lein against the boat.
 
Dec 23, 2016
191
Catalina 27 Clinton CT
JPM will get you a letter. It is like doing mortgages and finding an old mortgage on the title. With the banks being bought out, the new bank will do the research, but it does take some time. They make sure that they are not owed a penny but that is what takes so long. I wouldn't worry about it. Funny thing is it sounds like you a renewing the documentation. Someone at the Coast Guard didn't notice that it was already issued as a free a clear vessel and this is just a renewal?
 
Jul 27, 2011
4,989
Bavaria 38E Alamitos Bay
So a few weeks ago I got a letter from the Coast Guard; I was excited thinking it was my documentation transfer coming in BUT, it was a letter saying that there was a problem with transferring the documentation. Apparently they have a record that there was a mortgage on the boat from when it was originally purchased in 1984 but they do not have a record that it was paid off.

I bought the boat off of the original owner (whom is also a family friend) and the boat was paid off sometime in the 90's. He does not still have the letter saying it was paid off, and Hanover Trust who the loan was through no longer exists. I found out Hanover was bought out by JP Morgan/Chase. I called Chase 2 weeks ago and they were very pleasant, I explained the situation, they took all my and the boats info and said they would mail something out to me. I just called them again today and they stated they are still researching the HIN number and loan trying to find the records. They told me to call back in a week to check in.

Has anyone run into something like this before and how did you work it out?

and/or

Does anyone know of another avenue I can take to prove to the Coast Guard that the boat does not have an outstanding lien so I can get it documented?
When a similar thing happened to us in the 1990's, I told the previous owner, a friend, about it, and HE took care of it for me b/c HE said he was selling me a USCG-documented boat with a clear title, etc. Similar thing. A paid-off lien not properly recorded, etc. Took a month or so to get straight.
 
Nov 13, 2013
723
Catalina 34 Tacoma
The loan in question was between the PO and the bank. You had nothing to do with it. If you have a clear and free title, that is proof there is no outstanding loan. The Coast Guard needs more training on this. Try your application again and you may get the answer you want.
 
Jul 27, 2011
4,989
Bavaria 38E Alamitos Bay
The loan in question was between the PO and the bank. You had nothing to do with it. If you have a clear and free title, that is proof there is no outstanding loan. The Coast Guard needs more training on this. Try your application again and you may get the answer you want.
Doesn't work that way. The documentation is the title for a USCG documented vessel. Transference of title occurs when the seller surrenders his documentation to the UCSG for that boat to be re-documented to the new owner. That then becomes the new owner's title. The snag came b/c of a lien on the seller's title (documentation certificate) recorded at USCG. He has to clear it, or it cannot be re-titled (documented) to the new owner.

Documentation companies check on these things and straighten out problems for you, so you can get your documentation (= title). But, you have to pay for the service.
 
Last edited:
Jul 27, 2011
4,989
Bavaria 38E Alamitos Bay
You may have to settle for state registration while this gets sorted out, if you are using the boat.
I question whether or not this is possible. In FL and CA one cannot register a boat w/the state unless one has the title. The USCG will not give the title until the lien is removed. I remember having to use our boat w/o FL tags OR a USCG documentation during that interim. Not so strict back then (pre 9/11) at the marinas for all official documents b/f moving in. Besides, they knew the boat and its owner who had been there several years with the boat; knew of the transaction, etc., so we slipped along OK there until getting it fixed.
 

capta

.
Jun 4, 2009
4,766
Pearson 530 Admiralty Bay, Bequia SVG
I question whether or not this is possible. In FL and CA one cannot register a boat w/the state unless one has the title. The USCG will not give the title until the lien is removed. I remember having to use our boat w/o FL tags OR a USCG documentation during that interim. Not so strict back then (pre 9/11) at the marinas for all official documents b/f moving in. Besides, they knew the boat and its owner who had been there several years with the boat; knew of the transaction, etc., so we slipped along OK there until getting it fixed.
Wouldn't a notarized bill of sale and the old registration (document) be sufficient for most state registrations?
 
Jul 27, 2011
4,989
Bavaria 38E Alamitos Bay
Wouldn't a notarized bill of sale and the old registration (document) be sufficient for most state registrations?
The seller must surrender the documentation certificate to the USCG; the new owner would not have it in possession, at least according to the rules back then in the early '90's when this transpired for me. For the new boat (Bavaria), which was a repossession, I used a documentation service to oversee the transfer. Sort of learned me lesson from the earlier "brush with disaster."
 
Nov 13, 2013
723
Catalina 34 Tacoma
Doesn't work that way. The documentation is the title for a USCG documented vessel. Transference of title occurs when the seller surrenders his documentation to the UCSG for that boat to be re-documented to the new owner. That then becomes the new owner's title. The snag came b/c of a lien on the seller's title (documentation certificate) recorded at USCG. He has to clear it, or it cannot be re-titled (documented) to the new owner.

Documentation companies check on these things and straighten out problems for you, so you can get your documentation (= title). But, you have to pay for the service.
Thanks for the correction. Sounds like it is the PO's responsibility to provide proof the lien is cleared. Just as they would for a state registered vessel. Hope the OP didn't pay him until he had a clear title.
 
Jun 7, 2016
315
Catalina C30 Warwick, RI
Thanks for the correction. Sounds like it is the PO's responsibility to provide proof the lien is cleared. Just as they would for a state registered vessel. Hope the OP didn't pay him until he had a clear title.
The PO is a close family friend i've known since I was born so im not worried about if it was paid off. I know the title is paid off its just that the CG was never given a copy of the pay off in the 90s.