Avoiding the responsibility in a Nonrecourse Loan?
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ilario
Apprentice
Joined: 19 Apr 2007
Posts: 3
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 Posted: 01/20/09 - 05:43 Post subject: |
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| Have any of you here got any views about Nonrecourse Loans? I have just come across them, not knowing they existed at all until quite recently. But the first impression that I got of such a Nonrecourse Loan is that it is a great way for the borrower to avoid their responsibility. Don't Nonrecourse Loan have higher default rates too? |
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michael
Apprentice
Joined: 02 Jun 2007
Posts: 5
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| Posted: 02/04/09 - 02:30 Post subject: |
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| That is hardly the case, because the value of the collateral given in a Nonrecourse Loan often outdoes the loan value by a big amount. This over compensation, as you like, means that there is a value to loan ration of about 80 per cent or 90 per cent in most cases. This can change, but normally not so much that the collateral cannot cover the loan. |
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isador
Apprentice
Joined: 27 Dec 2005
Posts: 11
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| Posted: 02/18/09 - 23:17 Post subject: |
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| A Nonrecourse Loan is one like any other loan. Lenders do assess the risk before agreeing to a loan, and like the other guy mentioned collateral given is in most situations more than sufficient. Also, the borrowers' default risk is assessed through credit checks and the like, as is the case with other loans. |
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