Search results
Results From The WOW.Com Content Network
Thus, nonrecourse debt is typically limited to 50% or 60% loan-to-value ratios, [1] so that the property itself provides "overcollateralization" of the loan. The incentives for the parties are at an intermediate position between those of a full recourse secured loan and a totally unsecured loan.
[1] The availability of a deficiency judgment depends on whether the lender has a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, the original loan(s) obtained to purchase property is/are non-recourse, but subsequent refinancing of a first mortgage and/or acquisition of a 2nd (3rd, etc.) are recourse ...
Whether secured debt is recourse or nonrecourse can have significant consequences if the debt is settled in foreclosure of the secured property. [12] Generally, while the net gain or loss is the same regardless of the classification of the debt (it will always be the difference between the basis of the burdened property and the amount of the ...
A non-recourse loan is a type of debt that’s secured by collateral, such as an individual’s car, house or another typically illiquid asset. Consult with a local financial advisor today. How ...
Non-recourse factoring should not be confused with making a loan. [ 13 ] [ 1 ] When a lender decides to extend credit to a company based on assets , cash flows , and credit history, the borrower must recognize a liability to the lender, and the lender recognizes the borrower's promise to repay the loan as an asset.
This case supports the doctrine of U.S. income tax law that a seller of property subject to a nonrecourse debt (as opposed to a recourse debt where the seller may remain liable for any unsatisfied balance remaining after the transfer) realizes an amount that includes the debt assumed by the purchaser. This is an important concept because a ...
A legal recourse is an action that can be taken by an individual or a corporation to attempt to remedy a legal difficulty. A lawsuit if the issue is a matter of civil law Contracts that require mediation or arbitration before a dispute can go to court
Commissioner v. Tufts, 461 U.S. 300 (1983), was a unanimous decision by the United States Supreme Court, which held that when a taxpayer sells or disposes of property encumbered by a nonrecourse obligation exceeding the fair market value of the property sold, the Commissioner of Internal Revenue may require him to include in the “amount realized” the outstanding amount of the obligation ...