Foreclosure Process

recourse v non recourse, deficiency v. anti deficiency statutes

Posted on Friday, November 12, 2010

The following is a list of non-recourse and recourse states. Recourse basically means that the lender can come after you (has recourse against you) if your house sold at auction or through a short sale for less than the amount owed the lender. If you borrowed $350,000 to buy your home and it sold at auction for $200,000 there is a deficiency of $150,000. That lender can have recourse against you for that amount depending on your state.

In many states, non-purchase money second mortgages (such as HELOCS) are recourse loans. So, the loan you took out to purchase your house could be non-recourse, but that equity line of credit you used to buy a boat won't be.

Remember that you may be liable for taxes on the deficiency regardless of whether the loan is recourse or non-recourse. Each state has its own variation on the application of its recourse and deficiency statutes. You need to look to your state's statutes and speak to a local attorney for an interpretation.

Non-Recourse States
Alaska (AK)
Arizona (AZ)
California (CA)
Connecticut (CT)
Florida (FL)
Idaho (ID)
Minnesota (MN)
North Carolina (NC)
North Dakota (ND)
Oregon (OR)
Texas (TX)
Utah (UT)
Washington State (WA)
Recourse States
Alabama (AL)
Arkansas (AR)
Colorado (CO)
Delaware (DE)
District of Columbia (DC)
Georgia (GA)
Hawaii (HI)
Illinois (IL)
Iowa (IA)
Indiana (IN)
Kansas (KS)
Kentucky (KY)
Louisiana (LA)
Maine (ME)
Maryland (MD)
Massachusetts (MA)
Michigan (MI)
Montana (MT)
Mississippi (MS)
Missouri (MO)
Nebraska (NE)
Nevada (NV)
New Hampshire (NH)
New Jersey (NJ)
New Mexico (NM)
New York (NY)
Oklahoma (OK)
Pennsylvania (PA)
Puerto Rico (PR)
Rhode Island (RI)
South Carolina (SC)
Tennessee (TN)
Vermont (VT)
Virginia (VA)
West Virginia (WV)
Wisconsin (WI)
Wyoming (WY)

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