The note is the document used to create a legal debt. In most states, the note creates personal liability for residential borrowers. When mortgage lenders have access to other borrower assets in situations where the foreclosure sale price is less than the total amount of the loan outstanding, we commonly refer to this type of loan as a:

Question

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A recourse loan is a type of loan where the lender has the right to pursue the borrower's assets in case of a default or foreclosure. This is in contrast to a nonrecourse loan, where the lender's remedies are limited to the collateral securing the loan. In the scenario described in the question, where the foreclosure sale price is less than the loan balance, the lender would have the right to pursue the borrower's other assets to recover the remaining debt, which makes it a recourse loan.

The Note Is the Document Used to Create a Legal