Sometimes called a dry mortgage, the non-recourse loan does not hold the borrower personally liable for the loan obligation. Rather, the loan holds the property and the ownership entity created by the borrower--i.e., corporation, partnership, limited liability company, etc.--directly responsible. In the case of a default, if the property and entity cannot adequately satisfy the sums due, the lender cannot pursue the borrowers personally. For more information, see the "Mortgage Deed and Promissory Note" article in the "Real Estate In-Depth" section.
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