A nonrecourse note limits the lender's ability to collect what is owed to only the collateral securing the loan, meaning the borrower is not personally liable beyond the collateral. This is generally more advantageous to borrowers, as they are not personally at risk for deficiencies if the sale of the collateral does not cover the loan balance.

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A Nonrecourse Note

Question 21

Multiple Choice

A nonrecourse note:

A) results in a borrower becoming personally liable if there is a deficiency at the foreclosure sale.
B) is the kind of note that homeowners typically sign.
C) is more advantageous to borrowers than to lenders.
D) all of the above.

Correct Answer: