0 used to describe a loan in which the lender has the right to take only the asset bought with the loan if it is not paid back, and does not have the right to take any other assets: --
In short, many jurisdictions hold that the loans obtained at the acquisition of a property (purchase-money) are non-recourse, and most if not all subsequent loans are recourse.
Yet, research into the structure of the program shows that the overbidding incentives in non-recourse loans are subtle.
This money is true non-recourse funding, in that if the case is lost, you owe the consumer legal funding company nothing.
Junior tranche investors achieve a leveraged, non-recourse investment in the underlying diversified collateral portfolio.
Further, the nature of the loan (recourse or non-recourse) is also insignificant for purposes of determining basis.
A non-recourse factor assumes the credit risk that an account will not collect due solely to the financial inability of account debtor to pay.
Thus, non-recourse debt is typically limited to 50% or 60% loan-to-value ratios, so that the property itself provides overcollateralization of the loan.
In some states, antideficiency statutes provide that mortgages secured by personal residences are non-recourse against the borrower.
