Explanation:
A nonrecourse mortgage means that the loan is secured by the home itself, but the borrower is not personally liable for the outstanding balance if the home's value falls below the mortgage amount. In the event of default, the lender can foreclose on and seize the home but cannot go after the borrower's other assets to recover the remaining debt. This feature was prevalent in certain U.S. states and contributed to strategic defaults during the subprime mortgage crisis.
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Q.100 Which of the following features in some states of the U.S. allowed the lender only to take possession of the borrower's home financed with a mortgage but not his other assets in the event of default?
A
Teaser Rate.
B
NINJA borrowing.
C
Nonrecourse mortgage.
D
Securitization.
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