[quote=Kingside][quote=investor]Putting morality aside, most commercial loans are non-recourse and have been for many years. .[/quote]

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Most commercial loans, certainly most real estate commercial loans that involve LLCs/Corporate entities, are personally guaranteed by the principal(s). In California, those personal guarantees are very much recourse, even after the lender forecloses non-judicially and credit bids to get a deficiency.

And the lenders do sue on them.[/quote]
Kingside. Someone forms an LLC or some other type of corporation to minimise/avoid personal liability, especially with the opening up of the new world centuries ago. Of course a lender today would like to have a borrower personally sign for a company’s loan or for a commercial loan.It reduces their exposure. Most investors don’t in order to avoid having to loose personal money if the investment goes bad. I won’t personally sign on a commercial loan but I do take a hit on the interest rate if I don’t.This has been standard practice for a long time. Talk to the folks at marcus and millichap. It does set up a kind of moral hazard but not personally signing for commercial loans is nothing new. Personal homes are different. Always have been. you have to personally sign for those loans.