What does "recourse" mean on a short sale?
Short sales are now a significant part of our local real estate market. They are hard. In addition to the logistical difficulty of making the deal happen, there are a few legal traps for the unwary, notably recourse or non-recourse short sale approval. Remember that short sale approval is necessary in order to get the lender to release the lien of their deed of trust without the underlying note (house loan) being paid in full. When a short sale lender approves the short sale it may do so either without requiring the remaining balance to be paid after the closing (known as a non-recourse approval) or it may require the remaining balance to be paid by what amounts to be a new loan (known as recourse short sale approval).

You can search short sales at www.TheSavvyRealEstateInvestor.com, as well as read more about Short Sales (search articles)

Posted By: Brian D. Lytle, Esq. on Friday, February 26, 2010