No personal liability. Lenders may take the property pledged as collateral to satisfy a debt, but have no recourse to other assets of the borrower. Many lenders will offer non-recourse loans with â€œcarve-outsâ€ for waste, fraud or environmental issues.
Refers to a dealership whose arrangement with its "financing" sources is such that the dealership is relieved of any responsibility for its customers’ auto loans. Other than supplying background information on the applicant, this kind of dealership relies solely on the loan application decisions the bank makes. (See Recourse.)
No personal liability. Lenders may take the property pledged as collateral to satisfy a debt but have no ability to take the other assets of he borrower.