This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
Most people are shocked that they can lose their property and still owe taxes on the profit.
Recourse means that the borrower has personal liability for the loan, in addition to the risk of losing his real property. State Law protects borrowers from personal liability on a purchase mortgage for a home which they occupy at purchase. This law applies to properties of up to 4 units, and applies only to loans used to purchase the property. Purchase loans include bank loans and seller carrybacks. IF there is no cash paid out to the borrower, or if any cash paid out is used for property repairs or improvements.