Recourse


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Related to Recourse: Without recourse, have recourse to

Recourse

Term describing a type of loan. If a loan is with recourse, the lender has a the ability has the ability to fall back to the guarantor of the loan if the borrower fails to pay. For example, Bank A has a loan with Company X. Bank A sells the loan to Bank B with recourse. If Company X defaults, Bank B can demand Bank A fulfill the loan obligation.

Recourse

Describing a loan for which there is a co-signer. That is, if the borrower defaults on the loan, the co-signer becomes legally liable for repayment of a recourse loan. Thus, in addition to any collateral that may or may not secure the loan, the lender is further protected from default by the existence of the co-signer. See also: Non-Recourse Loan.

recourse

(1) The ability of a lender to demand payment from a borrower if the collateral is insufficient to pay the debt in full,or even if the lender chooses not to attempt foreclosure of the collateral. (2) The requirement that the seller of a promissory note repurchase it if the borrower defaults.

Example: Vic's Vinyl Siding agrees to install siding on Nellie's house in exchange for her agreement to pay $300 a month over the next 5 years, for a total of $18,000. Nellie signs a promissory note with those payments, and a mortgage. Vic does the work and then sells the note and mortgage to Quick Cash Company, with recourse, for $10,000. Three days later the siding falls off the house and Nellie refuses to make any more payments. Under federal law, she can refuse to pay Quick Cash Company even though her dispute is with Vic's Vinyl Siding. Because the sale was with recourse, Quick Cash can force Vic to repay the $10,000 to them and take back Nellie's promissory note and mortgage. Nellie and Vic may then battle over the quality of the work.

References in classic literature ?
M'Dougal, we are told, had recourse to a stratagem by which to avail himself of the ignorance and credulity of the savages, and which certainly does credit to his ingenuity.
The first time he had recourse to his new judge was when a French prisoner, a colonel, came to him and, after talking a great deal about his exploits, concluded by making what amounted to a demand that Pierre should give him four thousand francs to send to his wife and children.
After leaving the road she found herself in thick bush and as the sky was heavily overcast she presently had recourse to her compass and it was not until then that she discovered to her dismay that she did not have it with her.
She must reach Wilhelmstal at once and she was determined to do so even if she must have recourse to her pistol.
He therefore had recourse to his usual receipt of patience, for, though he was not a great adept in Latin, he remembered, and well understood, the advice contained in these words
But he knew his recourse, and made for it at a gallop.
They had to have recourse to the sure, never-failing topic--gossip.
I say,' resumed the secretary, in a slow, impressive way; 'we can't tell what may come to pass; and if we should be obliged, against our wills, to have recourse to violence, my lord (who has suffered terribly to-day, as far as words can go) consigns to you two--bearing in mind my recommendation of you both, as good staunch men, beyond all doubt and suspicion--the pleasant task of punishing this Haredale.
Dissatisfied with the pacific aspect of a face which had no more than the faintest hint of flaxen eyebrow, together with a pair of amiable blue-gray eyes and round pink cheeks that refused to look formidable, let him frown as he would before the looking-glass (Philip had once told him of a man who had a horseshoe frown, and Tom had tried with all his frowning might to make a horseshoe on his forehead), he had had recourse to that unfailing source of the terrible, burnt cork, and had made himself a pair of black eyebrows that met in a satisfactory manner over his nose, and were matched by a less carefully adjusted blackness about the chin.
11, 2015 /PRNewswire-iReach/ -- Treasure Coast Capital Trust, with offices in Vero Beach, FL and New York City, has teamed up with Jordan Capital Finance to develop two new investment programs: A Self-Directed IRA program and a Non Recourse Loan program.
NAA/NMHC and a coalition of trade groups have filed a "friend of the court" brief in an important case pending before the Michigan Supreme Court that could have a chilling effect on conduit borrowers, including apartment firms, by converting non-recourse loans into recourse loans (Wells Fargo Bank, N.
The lender's recourse is only to the mortgaged property, even if the lender suffers a deficiency after a sale of the property.