Talk:Nonrecourse debt

Debt forgiveness in Europe

Article states that mortgage debt forgiveness is enforced in much of Europe after eviction - taken from the source at n.2 - but the source is very brief on what is a complicated point.

(new entry, the above was not signed) Agreed, this should be removed, unless more details and sources are given. In Germany, the biggest economy in the EU, nonrecourse loans without personal liability are unknown, and forgiveness after eviction is also basically unknown. Any remaining debt after foreclosure stands for 30 years. There is of course a private insolvency/bankruptcy system with a 6 year period during which every cent above a certain minimal income goes to the creditors. Also, AFAIK, there are states in the US that do not allow non-recourse loans. Is there anyone who has more details on this and can add something? This seems very essential information and is of course highly relevant after since the housing crisis in the US....87.78.8.224 (talk) 18:04, 22 March 2013 (UTC)

I do not think the reference or the statement should be removed. I understand that most likely the Irish Times is incorrect; I understand that, at least in Germany, "deficiency judgments" are allowed and are commonplace. It gives housing crises an added importance in places like Germany, whereas in California people go on with their lives with little issue. But it is a reliable and verifiable source. The fact that not even the major newspapers have any clue goes a long way to show the state of affairs in Europe with regards to the issue. (The Bible: The book everyone has, but no one has read. The Law: The book no one has or can afford to buy and often is not even printed, but apparently everyone has read. Ignorance is no excuse, so they say.)

I have also added a reference that shows even in the United States they are not so commonplace, and with caveats. The most common caveat is that deficiency judgments are limited by property's fair market value. California, as I understand the law, is actually more complex, as its a "single action" state; after the creditor/lien-holder enters judgement for a foreclosure/trustee's sale, the game is up. They must either seize the security interest (claim ownership of the property) or enforce the debt (get a judgement for moneys owed, and possibly attach a lien to the house to enforce it whenever the owner decides to sell the house, if at all), but apparently cannot do both (security first rule). That alone makes the loans non-recourse, but I think it is specific towards residential housing. And of course, this, as many people do not understand, only covers the senior lien or whatever (the main loan); the debtor is liable for any refinancing loans. (Now you know why they are so keen on "helping" you refinance!) You're on the hook personally for any refinancing. I'm reading "The Sanction for Violation of California's One-Action Rule" in the California Law Review, and it's abstract sums it up nicely:

Commonly referred to as the one-action rule, section 726(a) most obviously aims to prevent a real property secured creditor from suing the defaulting debtor on the indebtedness itself prior to foreclosing on the security interest. If the debtor in the situation described does not raise the one-action rule as an affirmative defense and if the creditor obtains a personal judgment on the debt, the one-action rule would forever bar the creditor from foreclosing on the security interest.

Int21h (talk) 20:29, 24 August 2013 (UTC)

And I should also note, assuming what your saying is true, that Germany forgives the debt after 30 years, then the Irish Times article would also be technically correct with respect to Germany: Germany forgives mortgage debt after eviction. Of course the part they leave out is that your almost dead when it is forgiven, and it may cost a house or two to pursue such an action in court. But hey, technically, German does. But I agree, such statements are misleading. Int21h (talk) 20:40, 24 August 2013 (UTC)

We may want to think about weakening the statement herein. Maybe "it has been said that" or something, given that the reference is weak, and the assertion is seriously in question. Int21h (talk) 21:35, 29 August 2013 (UTC)

Non-recourse loans are peculiar to America, and a primary cause of the GFC. The reference to Europe should be deleted, it adds noting and is confusing. Most of Europe does not have non recourse lending (none of it does), nor do they "enforce mortgage debt forgiveness after eviction". There is no evidence to support the claims made in the articleRoyalcourtier (talk) 09:03, 6 February 2015 (UTC)

"Most of Europe enforces mortgage debt forgiveness after eviction.[4]"

I'm not sure this statement - or the source quoted - is accurate. Here is an article published by the St. Louis Fed implying that most European mortgages are recourse debt - ie, not forgiven.

https://www.stlouisfed.org/Publications/Regional-Economist/July-2013/Europe-May-Provide-Lessons-on-Preventing-Mortgage-Defaults#endnotes

First time editing anything on Wikipedia, so apologize for breaches of etiquette Mfriedrichs12 (talk) 13:37, 18 February 2015 (UTC)

Assessment comment

The comment(s) below were originally left at Talk:Nonrecourse debt/CommentsTalk:Nonrecourse debt/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.

Last edited at 06:56, 31 October 2007 (UTC). Substituted at 01:27, 30 April 2016 (UTC)

Merge "Recourse debt" into this article

The article Recourse debt is quite short, and mostly repeats what is said here. This makes sense as recourse debt is simply the opposite of non-recourse debt.

So I propose merging the article "Recourse debt" into this article. Sebastian (talk) 11:00, 11 April 2024 (UTC)