nonrecourse loan

Definition

A loan secured only by collateral, where the lender cannot pursue the borrower's other assets if the property is insufficient to cover the debt. The 'take the house and leave me alone' mortgage.

Example Usage

His commercial property loan was nonrecourse, so when values crashed, he simply mailed the keys to the bank and walked away without personal liability.

Origin

Commercial lending terminology from mid-20th century structured finance

Fun Fact

While common in commercial real estate, residential nonrecourse loans are rare because lenders want borrowers personally on the hook to discourage strategic defaults.

Source: Commercial mortgage-backed securities lending standards

Related Terms

Beginner

love letter

A personal note from buyers to sellers describing their emotional connection to the property and how they'll cherish it forever. They're increasingly discouraged or banned due to fair housing concerns, but still occasionally work to sway sentimental sellers.

🏠 Real Estate

Intermediate

tenancy in common

Co-ownership where each party owns a specific percentage share that can be sold or willed independently, without right of survivorship. The 'we own this together but I want out of this relationship' ownership structure.

🏠 Real Estate

Beginner

homeowner

Someone who has traded the freedom of renting for the privilege of paying property taxes, fixing broken toilets at 2 AM, and obsessing over lawn care. Technically owns a house, but in reality, is owned by a mortgage, maintenance costs, and the HOA. The American Dream™ in human form.

🏠 Real Estate

Advanced

replacement reserves

Funds set aside for replacing building components and systems that wear out over time, essential for multifamily and commercial property management. The 'we know the roof will eventually die' savings account.

🏠 Real Estate

Advanced

habendum clause

The deed section beginning with 'to have and to hold' that defines the extent of ownership being conveyed. Medieval legal poetry that survived into modern contracts for no good reason.

🏠 Real Estate

Beginner

commission

The beautiful moment when someone gets paid a percentage for making something happen, whether that's selling a house, brokering a deal, or convincing someone to buy timeshares. It's the financial incentive that turns salespeople into your new best friend until the contract is signed. In real estate, it's typically the 5-6% that makes agents answer your calls at 9 PM.

🏠 Real Estate

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