Non-Recourse or Recourse Loans – Short Sales and Foreclosure
Hi this is Kerri from the Bay Area Short Sale Angels, Northern California's number one short sale team. A recourse loan means that the bank can come after you for any unpaid debt regardless if you foreclose or short sale. Non recourse loans mean that they can't. California is a non-recourse state as long as the loan was taken out as purchase money. That means the money, whether its a first or second was taken out at the origination of purchasing the property. Now let's say you got a loan, you got into your property, and then a while later you took out an equity line, a second loan. The second loan is a recourse loan. So, if you short sale, what does that mean? It means that the bank can ask to have the homeowner to sign a promissory note, sometimes for the amount that's owed, sometimes less than the amount owed.…