Answer: only allows the lender to use the property to recover the outstanding mortgage balance.

## Explanation A non-recourse residential mortgage loan is a type of loan where the lender's only recourse in case of default is to seize and sell the property that serves as collateral for the loan. **Key points:** 1. **Limited recourse**: The lender cannot pursue the borrower's other assets or income to recover any deficiency if the sale of the property doesn't cover the outstanding mortgage balance. 2. **Property as sole collateral**: The property itself is the only security for the loan. If the property value declines below the loan amount, the lender bears the loss. 3. **Contrast with recourse loans**: In recourse loans, lenders can seek deficiency judgments against borrowers and pursue their other assets if the foreclosure sale doesn't cover the full loan amount. 4. **Risk allocation**: Non-recourse loans shift more risk to lenders, which is why they often have stricter underwriting standards and may require larger down payments. **Why option B is correct**: It accurately describes that the lender can only use the property to recover the outstanding mortgage balance, which is the defining characteristic of non-recourse loans. **Why option A is incorrect**: This is too extreme - lenders CAN recover the outstanding balance, but only through the property. **Why option C is incorrect**: This describes a recourse loan, not a non-recourse loan.

Author: LeetQuiz .