In California how can you determine whether your mortgage loan is a non recourse loan or a recourse loan?

Answer 1

http://www.sandiegopredatorylending.com/

"The big mistake homeowners make is turning a "non-recourse" second loan into a "recourse" loan by refinancing it. A non-recourse loan is a loan that the bank can only look to their secured interest.

So how is a second mortgage a non-recourse loan? Simple, it was "purchase money" for your home. A purchase money loan is one where the money went from the lender, to escrow, and then to the seller or to pay purchase closing costs. In California purchase money loans made on your home (note: not second home or investment properties) are non-recourse. It's simple as that."

Also, it's California state law. It may not be explicitly written in the loan documents. Check out California Code of Civil procedure section 580b:

http://www.legaltips.org/california/california_code_of_civil_procedure/577-582.5.aspx

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580b. No deficiency judgment shall lie in any event after a sale of real property or an estate for years therein for failure of the purchaser to complete his or her contract of sale, or under a deed of trust or mortgage given to the vendor to secure payment of the

balance of the purchase price of that real property or estate for

years therein, or under a deed of trust or mortgage on a dwelling for

not more than four families given to a lender to secure repayment of

a loan which was in fact used to pay all or part of the purchase

price of that dwelling occupied, entirely or in part, by the

purchaser.

Where both a chattel mortgage and a deed of trust or mortgage have

been given to secure payment of the balance of the combined purchase

price of both real and personal property, no deficiency judgment

shall lie at any time under any one thereof if no deficiency judgment

would lie under the deed of trust or mortgage on the real property"

or estate for years therein.