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With the interest only loan, wouldn't you need to make sure that you had non-recourse debt, or that the property was bought with a business entity that protecte
by mightybyte 18y ago
With the interest only loan, wouldn't you need to make sure that you had non-recourse debt, or that the property was bought with a business entity that protected your 2 million in case of default? Are most mortgages (I'm specifically thinking in the U.S.) non-recourse in the sense that the property is the only collateral? Or is there still a way for the bank to come after your personal assets? I'd want to be 100% sure of the answers to these questions before betting on being able to walk away if the house loses value.
- lasthemy1 18y agoHere's enough information to be dangerous: http://www.sandiegopredatorylending.com/?p=33 http://www.sandiegopredatorylending.com/?p=33
- Retric 18y agoMost private mortgages in the USA use the house as the only collateral, however if you put less than 20% down most banks require some form of PMI to reduce their risk. This is a large part of why the housing bust has hit banks so hard, also many of the company's selling PMI went bust so the coverage became worthless.