Finance
In New Mexico, 'recourse' in a mortgage loan means the lender:
ACan only foreclose on the property
BCan pursue the borrower personally for any deficiency balance remaining after foreclosure sale✓ Correct
CMust first obtain government approval before foreclosing
DMust offer a loan modification before foreclosing
Explanation
A recourse loan allows the lender to obtain a deficiency judgment against the borrower for the difference between the outstanding loan balance and the foreclosure sale proceeds. Most residential loans in NM are recourse unless structured as non-recourse.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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