Parsons Realty

Full Service - Low Flat Fee

  • Home
  • Real Estate Search
  • Buyers
  • Blog
  • Contact Us
You are here: Home / Blog / Recourse Loan or Nonrecourse Loan?

Recourse Loan or Nonrecourse Loan?

December 10, 2008 By

Knowing whether or not a loan is recourse or nonrecourse debt is critical when borrowers are facing foreclosure.  Depending on the type of debt there could be tax consequences for a foreclosure or a short sale.

The main difference in a recourse loan and a nonrecourse loan is the liability.  With a nonrecourse loan the lenders only way of recovering their loan is the security, in this case the property.  With a recourse loan the lender is able to go after the borrowers assets if they do not receive enough from the secured asset to pay the loan off in full.

Whether or not a loan is a nonrecourse or recourse depends on the type of loan. 

Notes secured by real estate are nonrecourse when the note is:

·         The original purchase money loan on an owner occupied one-to-four unit residential property;

·          A seller carry back note secured by the real estate sold; or

·         A note containing an exculpatory clause, relieving the borrower of liability.

Examples of recourse loans are refinances of existing mortgages, home improvement loans, equity lines of credit, and loans, other than seller financing, securing a debt for purchase of property that is not an owner-occupied one-to-four unit property.

With recourse debt the lender is not limited to taking the property back and the borrower may be personally liable on the debt. 

Here is a handout from the California Association of REALTOR’s that explains more about recourse and nonrecourse debt.

https://www.parsonsrealty.com/parsons_realty/taxes/car_faq.pdf

Filed Under: Blog, Foreclosure Help, short sales Tagged With: foreclosure, redding

530-222-1818
1171 Hilltop Dr
Redding CA 96003

Latest News

  • The Five Most Expensive Homes For Sale In Redding, CA
  • Homes For Sale In Redding, CA Under $300,000
  • Redding Homes For Sale – Inventory Starting to Climb
  • Redding Weekly Real Estate Report: April 8 2013
  • Palo Cedro Home Sales – February 2013

Custom Home Search

  • Golf Course Homes
  • Homes with a Pool
  • Luxury Homes For Sale
  • Waterfront Properties

Subscribe

We have new properties coming. Get the latest updates delivered to your inbox in an easy to read email presentation. Imagine finding your next home tomorrow. It happens. Please subscribe below.

We respect and value your privacy. We will only deliver property updates to your email address.

Redding Properties

189 Listings
898 Palatine Ct, Redding, CA 96001

$799,999 4 beds  3 baths  3,386 sqft 898 Palatine Ct
Redding, CA 96001

IDX
3732 Mercury Dr, Redding, CA 96002

$239,900 3 beds  1 baths  920 sqft 3732 Mercury Dr
Redding, CA 96002

IDX
3399 Laver St

$538,888 4 beds  2 baths  1,877 sqft 3399 Laver St
Redding, CA 96002

IDX
3155 Colombard Walk, Redding, CA 96001

$545,000 4 beds  2 baths  2,200 sqft 3155 Colombard Walk
Redding, CA 96001

IDX
13404 Kings Way, Redding, CA 96003

$430,000 3 beds  2 baths  1,609 sqft 13404 Kings Way
Redding, CA 96003

IDX
6832 Tucker Ln, Redding, CA 96002

$1,250,000 4 beds  3 baths  3,000 sqft 6832 Tucker Ln
Redding, CA 96002

IDX
688 Mission De Oro Dr, Redding, CA 96003

$375,000 4 beds  3 baths  1,692 sqft 688 Mission De Oro Dr
Redding, CA 96003

IDX
Primary

$359,000 4 beds  2 baths  1,506 sqft 2737 Camulos Way
Redding, CA 96002

IDX
3480 Hillcrest St, Redding, CA 96001

$359,000 3 beds  2 baths  1,502 sqft 3480 Hillcrest St
Redding, CA 96001

IDX
684 Brock Dr, Redding, CA 96003

$349,900 3 beds  2 baths  1,332 sqft 684 Brock Dr
Redding, CA 96003

IDX
previous next

IDX MLS IDX Listing Disclosure © 2022

Information deemed reliable but not guaranteed.

Social Media

  • Facebook
  • Instagram

© Copyright 2022 Parsons Realty · Lic# 01312921 · All Rights Reserved · Powered by steelbridge.io