Recourse vs Non-Recourse Loans

The nature of the mortgage and real estate industries are such that there are lots and lots of regulations. On the financial side, a concept that is important to understand is the recourse vs non-recourse loan. When a home is foreclosed on by a lender, they eventually sell it and apply the proceeds to the original loan amount. Ah, but what if the proceeds don't cover the original loan amount? In a recourse state, the lender can come after the borrower for the rest of the proceeds. In a non-recourse state, the lender cannot. If you are considering buying a home, make sure you know what type of state you are in.