Non-Recourse Loans

Non-Recourse Loans

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What Are Non-Recourse Loans & Why Should You Care?
Non-recourse loans are the loans that are secured by collateral (typically, real estate) and don’t require a personal guarantee by the borrower. In contrast, recourse loans are the loans that, in addition to being secured by collateral, also need a personal guarantee by a borrower. The overwhelming majority of residential mortgages are recourse loans. If a borrower fails to pay a mortgage, a lender cannot only foreclose on the house but also can go after that borrower’s personal assets.

Non-Recourse Loans