What is the difference between a recourse and a non recourse loan?
In general, a purchase money loan is considered to be a “non recourse” loan, while a “cash out” loan is considered to be a “recourse” loan. The difference between these two loans is that in a “recourse loan” the lender technically has recourse to go after the borrower for the money they lose in a foreclosure. I say “technically” because, for this to happen, the lender has to file a judicial foreclosure, which is rarely done in California. The overwhelming majority of foreclosures in California are “non-judicial” foreclosures, where the property is sold at a trustee sale.
Related Questions
- What is the difference between a lawsuit cash advance, legal finance, lawsuit funding, a lawsuit loan and pre-settlement funding?
- Whats the difference between a supervised and nonsupervised lender (both mortgagee and loan correspondent)?
- What Is the Difference Between a Refund Anticipation Loan and a Refund Anticipation Check?
