What Is The Difference Between A Recourse And A Non Recourse Loan?

In general, a purchase money loan is considered to be a "non recourse" loan, while a "cash out" loan is considered to be a "recourse" loan.

The difference between these two loans is that in a "recourse loan" the lender technically has recourse to go after the borrower for the money they lose in a foreclosure. I say "technically" because, for this to happen, the lender has to file a judicial foreclosure, which is rarely done in California.

The overwhelming majority of foreclosures in California are "non-judicial" foreclosures, where the property is sold at a trustee sale.