For a loan sold with recourse,

Question

Quizplus · Accepted Answer

In a loan sold with recourse, the seller does have further obligations, such as the potential need to compensate the buyer in case of borrower default. This means the seller might have to recognize a contingent liability and cannot simply remove the asset from the balance sheet without any further note. Therefore, options A, B, and C are incorrect, and a reserve requirement might indeed be imposed to cover potential losses, making D incorrect as well.

For a Loan Sold with Recourse