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The Scope Of The Borrower's Liability In A Nonrecourse Real Estate Loan, Gregory M. Stein

Washington and Lee Law Review

The nonrecourse real estate lender agrees to seek satisfaction solely from the mortgaged property and not from the borrower or any of its equity holders personally. The lender presumably receives consideration for its relinquishment of this important remedy, and it would be unfair for a court later to award the lender a personal judgment against the borrower solely because the foreclosure sale proceeds were insufficient to satisfy the debt. Because the nonrecourse lender cannot reach the borrower's personal assets, the location of the dividing line between the mortgaged property and the borrower's personal assets turns out to be far more …