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Is mortgage loan a non-recourse or a recourse debt?

April 26, 2017debt mortgage loan non-recourse recourse

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Is mortgage loan a non-recourse or a recourse debt?

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A mortgage loan is a non-recourse debt. It is secured by a pledge of collateral but for which the borrower is not personally liable. If the borrower defaults, the lender/issuer can seize the collateral, but the lender’s recovery is limited to the collateral. A non-recourse debt is usually carried on a company’s balance sheet as a liability, and the collateral is carried as an asset.