Recourse; The ability to go back to the assignor for satisfaction if the maker of the note doesn't pay. .. Useful if there is not enough equity in the property after forclosing to pay the debt.
Non-recourse: You look to the original maker of the Note and/or the property only. The person assigning the note to you has no liability.
In another context, a recourse loan means that the lender can obtain a judgement against you for any deficiency resulting from default on your mortgage loan. You are personally liable for any loan amount not paid off from the sale of your property at foreclosure.
In a non-recourse loan, you have no personal liability at all in the event of default. The lender accepts the risk that the property value alone is sufficient to cover the loan balance after you default.
"The ability to go back to the assignor for satisfaction if the maker of the note doesn't pay. .. Useful if there is not enough equity in the property after forclosing to pay the debt. "
So,Original maker of the note is the note holde?And the assignor is the Payor?
Can you please clarify it a little more: who is assignor, who is original maker
thanks
When you take out a real estate loan, you (the borrower) sign a promissory note (an IOU) that specifies the terms of repayment. At the same time, you also give the lender a mortgage on your property as security (collateral) for the note. If you default on your note, the lender has the right to foreclose on your property to satisfy the note.
The borrower is the note maker, the lender is the note holder. If the lender sells your note, say to Fannie Mae, the lender will assign the note to the new note buyer. The lender is the assignor of your note. The lender who assigns the note to the new note holder will assign the note without recourse. This means that the lender will not be liable to the new note holder for any deficiency resulting from your default on your loan.
Instead, the new note holder will look to the original borrower (the note maker) to satisfy any deficiency should the foreclosure sale fail to pay off the defaulted note to include the costs of foreclosure.
Recourse; The ability to go back to the assignor for satisfaction if the maker of the note doesn't pay. .. Useful if there is not enough equity in the property after forclosing to pay the debt.
Non-recourse: You look to the original maker of the Note and/or the property only. The person assigning the note to you has no liability.
Performing: Paying as agreed.
Non-performing: Not paying as agreed.
In another context, a recourse loan means that the lender can obtain a judgement against you for any deficiency resulting from default on your mortgage loan. You are personally liable for any loan amount not paid off from the sale of your property at foreclosure.
In a non-recourse loan, you have no personal liability at all in the event of default. The lender accepts the risk that the property value alone is sufficient to cover the loan balance after you default.
"The ability to go back to the assignor for satisfaction if the maker of the note doesn't pay. .. Useful if there is not enough equity in the property after forclosing to pay the debt. "
So,Original maker of the note is the note holde?And the assignor is the Payor?
Can you please clarify it a little more: who is assignor, who is original maker
thanks
When you take out a real estate loan, you (the borrower) sign a promissory note (an IOU) that specifies the terms of repayment. At the same time, you also give the lender a mortgage on your property as security (collateral) for the note. If you default on your note, the lender has the right to foreclose on your property to satisfy the note.
The borrower is the note maker, the lender is the note holder. If the lender sells your note, say to Fannie Mae, the lender will assign the note to the new note buyer. The lender is the assignor of your note. The lender who assigns the note to the new note holder will assign the note without recourse. This means that the lender will not be liable to the new note holder for any deficiency resulting from your default on your loan.
Instead, the new note holder will look to the original borrower (the note maker) to satisfy any deficiency should the foreclosure sale fail to pay off the defaulted note to include the costs of foreclosure.