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What is the difference between a recourse loan and a non recourse loan?

April 26, 2017loan recourse

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What is the difference between a recourse loan and a non recourse loan?

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A recourse loan means the loan is guaranteed by the borrower personally. A non recourse loan means a third-party organization is formed for the property, such as an LLC or corporation. If the loan defaults for any reason, the mortgage holder would the take control of the LLC or corporation.