{"id":645,"date":"2006-11-17T06:31:45","date_gmt":"2006-11-17T13:31:45","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=645"},"modified":"2007-01-24T23:37:04","modified_gmt":"2007-01-25T06:37:04","slug":"home-buyer-always-liable-for-mortgage","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/645\/home-buyer-always-liable-for-mortgage\/","title":{"rendered":"Home buyer always liable for mortgage . . ."},"content":{"rendered":"

This is my column from today’s Arizona Republic<\/i><\/a> (permanent link<\/a>). No fireworks, today, just real estate.<\/p>\n

Home buyer always liable for mortgage<\/b><\/p>\n

I got a great question by e-mail. It’s really a lender question, but it introduces a number of interesting topics.<\/p>\n

“Are homeowners personally liable for their mortgages? If yes, is it possible to structure a home loan that doesn’t require a personal guarantee?”<\/p>\n

Generally speaking, yes, a mortgage is secured both by the real property and by the borrower’s personal promise to repay the note.<\/p>\n

If the down payment is 10 to 20 percent, the personal promise may not be as significant. But if the down payment is very low or if real estate is declining in value, the lender will depend on the borrower to bring any shortfall to the closing table, should the home sell for less money than is owed on it.<\/p>\n

Many types of loans are not secured by the borrower’s personal promise to repay. The loan will be secured by the real property or by other assets. A foreclosure won’t affect the borrower’s personal credit.<\/p>\n

Here is an example that can be used for mortgages for residential rental homes: the non-recourse loan. The loan is secured by the real property only, with no “recourse” to the borrower on default.<\/p>\n

Obviously, the lender is going to make sure the amount lent is substantially less than the value of the property, that the property produces income sufficient to pay its own expenses, etc.<\/p>\n

This is an investment product, but the interesting thing about non-recourse loans is that they can be deployed by self-directed retirement accounts to own real estate.<\/p>\n

Your self-directed IRA, as an example, would have to make a hefty down payment on a piece of real property, and there are rules about what your IRA can own and to whose benefit. But by means of the non-recourse loan, your IRA can own real estate to build your retirement nest egg.<\/p>\n

But the answer to the main question is probably no, alas. I know of no primary-purchase mortgage loan that does not require the borrower to personally guarantee repayment.
\n<\/p>\n

Technorati Tags: arizona<\/a>, arizona real estate<\/a>, phoenix<\/a>, Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This is my column from today’s Arizona Republic (permanent link). No fireworks, today, just real estate. Home buyer always liable for mortgage I got a great question by e-mail. It’s really a lender question, but it introduces a number of interesting topics. “Are homeowners personally liable for their mortgages? If yes, is it possible to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[12,8,6,5],"tags":[],"class_list":{"0":"post-645","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-ask-the-broker","7":"category-investment","8":"category-marketing","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":602,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/602\/ask-the-broker-who-is-responsible-for-the-mortgage\/","url_meta":{"origin":645,"position":0},"title":"Ask the Broker: Who is responsible for the mortgage . . . ?","author":"Greg Swann","date":"November 4, 2006","format":false,"excerpt":"Holy smokes! I get questions for appraisers, for inspectors, for real estate attorneys, for everyone involved in a real estate transaction except the ding-dong Realtor. Here comes a question for mortgage lenders, who are entreated to chime in with better answers:Generally speaking, are homeowners personally liable for their mortgage? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1659,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1659\/divorcing-the-real-estate-commissions-is-simply-a-matter-of-hud-1-bookkeeping-effected-by-the-mortgage-lender\/","url_meta":{"origin":645,"position":1},"title":"Divorcing the real estate commissions is simply a matter of HUD-1 bookkeeping effected by the mortgage lender","author":"Greg Swann","date":"July 15, 2007","format":false,"excerpt":"In a charmingly romantic post this morning, Jonathan Dalton gets bogged down in the all-too-common idea that divorcing the Realtors' commissions would impose some new financial burden upon buyers, resulting in their loss of representation. This is false. Although we operate by the fiction that the seller pays the real\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7903,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7903\/fha-and-va-assumable-loans-offer-an-exit-strategy-for-todays-buyers\/","url_meta":{"origin":645,"position":2},"title":"FHA and VA Assumable Loans Offer an Exit Strategy For Today’s Buyers","author":"Brian Brady","date":"April 16, 2009","format":false,"excerpt":"How can an FHA mortgage or VA home loan sell a home faster?\u00a0\u00a0 When mortgage rates are 10% and the 5% government loan is assumable. I've taken a few pokes at the contributors on Active Rain; John MacArthur isn't one of them.\u00a0 John is a Branch Manager with Long and\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3874,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3874\/a-proposal-to-improve-mortgage-lending\/","url_meta":{"origin":645,"position":3},"title":"A Proposal to Improve Mortgage Lending….","author":"Tom Vanderwell","date":"August 13, 2008","format":false,"excerpt":"Since there are a variety of licensing, regulation, education, criminal background check proposals bouncing around in an effort to clean up the mortgage world, I thought I'd throw out my own proposal on how to improve mortgage lending. I'm proposing that as part of the training for becoming a mortgage\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17943,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17943\/can-you-waive-an-appraisal-when-purchasing-with-a-va-mortgage\/","url_meta":{"origin":645,"position":4},"title":"Can a veteran buyer waive an appraisal when purchasing with a VA mortgage?","author":"Brian Brady","date":"March 8, 2021","format":false,"excerpt":"Welcome to 2021 where offers are made above listing price and, to win the deal, the buyer waives the appraisal.\u00a0 When I was hired as a listing broker, I was able to get two of the offers to waive the appraisal by asking their respective lenders to run the desktop\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17763,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17763\/real-estate-agents-may-work-against-buyers-interests-with-shortened-contract-contingencies\/","url_meta":{"origin":645,"position":5},"title":"Real Estate Agents May Work Against Buyers’ Interests With Shortened Contract Contingencies","author":"Brian Brady","date":"January 22, 2021","format":false,"excerpt":"If you are reading this, you are probably a real estate agent or broker.\u00a0 Most of the people who read Bloodhound Blog are industry folks rather than consumers.\u00a0 Consumers DO read Bloodhound Blog but, all in all, our audience is mostly comprised of the industry grunts who show or list\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=645"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/645\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}