Perspective
Feb. 14, 2012
Guarantor beware — is the loan really non-recourse?
An appellate court ruling raises concerns for all guarantors of so-called "non-recourse" secured loan product. By Brian S. Weinhart of Steckbauer Weinhart Jaffe LLP
CORRECTION: A previous version misstated that Freddie Mac non-recourse loan products contain a solvency covenant in their single purpose entity provisions. Freddie Mac does not include the solvency covenant as a carve out in its most current form of non-recourse carve out guaranty.
Most borrowers under commercial mortgage-backed securities and other typical "non-recourse" secured financing, have long assumed that,...
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