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 periodicals archive ?
295 (2004), addressed the effects of guarantees by related owners and the impact of the "related partner exception" on the allocation of recourse debt.
In a recourse factoring arrangement, the factor is not taking a risk on the creditworthiness of the purchaser unless the company becomes insolvent, whereas in a non recourse factoring arrangement, the factor takes a risk on the creditworthiness of the Purchaser.
The holders of the recourse, within the meaning of law, were the following:
A borrower faces full recourse liability if it violates restrictions on sale of the property or interests in the borrower or on secondary financing as described in the loan documentation (commonly referred to as due-on-sale and due-on-encumbrance clauses).
The manufacturing, construction and service sectors are the main used of factoring credits with recourse in the country.
(19) In this second recourse by the EC to Article 21.5 of the DSU, the DSB referred the matter to a panel, which found that "the inconsistencies with ...
But this fledgling program suggests that the courts are not the best recourse for all victims, at least in the diocese of Albany.
Secured Note Structure: This alternative (See "Securitization Through the Issuance of Secured Notes" on page 72.) involves the issuance of senior, secured notes linked to the performance of a policy block, with no recourse to the company.
The experience of many was that the BOE took the position that a consumer's only recourse was against the seller, because the sales is levied on the seller for the privilege of selling in California.
On one hand, you may seek recourse by filing a complaint with the Attorney General's Office Bureau of Consumer Fraud in your state.
In addition to the published debates the author has recourse to newspaper reports, diaries and memoirs.
We may be teaching our children in the home that there's another recourse to hitting their siblings, but we aren't following it up" in the classrooms (Nimm 4).