Nationwide Mortgage Licensing System (NMLS) Practice Exam

What is the term for a loan secured by movable personal property?

1. Package mortgage

2. Chattel mortgage

3. Furnishing mortgage

4. Exotic mortgage

The correct answer is: Chattel mortgage

The term for a loan secured by movable personal property is a chattel mortgage. This type of mortgage specifically pertains to personal property that can be moved, as opposed to real estate, which is immovable. In the context of financing, a chattel mortgage allows the borrower to retain possession of the personal property while the lender has a security interest in it. This arrangement is commonly used for vehicles, equipment, or fixtures. Understanding the nature of the collateral is crucial in differentiating the kind of mortgage being described. While the other terms may refer to various forms of loans or mortgages, none specifically denote a loan secured by movable personal property. This distinction makes chattel mortgage the correct answer in the context of the question.