Recourse Loans - reality, or theory

I'm convinced the majority of walkaways are committed either by the stated/stated crowd or the over-leveraged. Serial refinancers had recourse loans.

Does anyone know if there really are banks going after borrowers with recourse loans or is the information we get about post closing financial issues with recourse loans simply anecdotal?

My guess is that even with a recourse loan, it's a walkaway without issue in the long run.

Any experts with experience - 2nd hand only, no 3rd or 4th hand info please.

No first hand experience here, thank gawd, but from the legalese of Cali and recourse/non-recourse loans... The only way a lender can legally go after the difference in the loan amount and sale amount is if they went through the judicial foreclosure process vs. the trustee sale process. Now... let me ask you this... Do you know of or have you even heard of 3rd hand of someone going/gone through a judicial foreclosure?

California is a single-action state....meaning that the lender either take the collateral back or go after the guarantor who signed (this was the case with the construction and perm commercial real estate loans I originated in my banking days). It's hard to squeeze juice out of a broke rock so 99.99% of the time the lenders will take the collateral back and leave the guarantor alone. I can't say for sure what happens with the power of lenders who did the refi's, HELOCs, or other subordinate loans on the property.

^^^ Try reading what I posted above. Recourse loans = judicial foreclosure = deficiency judgment. Recourse loans = trustee sale = NO deficiency judgment. Non-recourse loans = NO deficiency judgment = EVER.

I still think there is a growth industry in collection agencies buying up all the out of the money seconds and HELOCs that are floating around from the FCs and SSs. While a lot of the borrowers are deadbeats/broke from the first wave of subprime defaults, this latest round has a bunch of deadbeats that actually have jobs and incomes.

Just buy up the notes for pennies/$, wait a couple of years, and garnish them.