TeachMeFinance.com - explain without recourse
without recourse -- a term used in the secondary mortgage market. It is a clause in a sales contract by which a lender sells mortgage loans to an investor. It means the seller/lender is under no obligation to reimburse the buyer/investor for any losses resulting from the purchased loans. See with full recourse.
with full recourse -- a term used in the secondary mortgage loan market. It refers to a written clause in a sales agreement by which a lender sells mortgages to an investor. It means the seller/lender will fully reimburse the buyer/investor for any losses resulting from the purchased loans. This may be accomplished by the seller taking back any loans that become delinquent.
Without recourse -- The words "Without recourse to" before an indorsement on the back of a promissory note or bill of exchange (draft) absolve the person so signing from any legal process by the holder in case payment at maturity is not made. In other words, the indorser is a mere assignor of the title to the paper and is relieved from responsibility for its payment.
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