The fact that you are asking what a nonrecourse loan is tells me that you need to talk with a real estate attorney about your question whether to stay or walk. There are a lot of legal and tax issues related to foreclosing on your home. A nonrecourse loan means that the bank can only take your home and not come after any of your other assets. In CA (and Texas but the way) the loan that you bought your house with is by law, a nonrecourse loan – a purchase money loan. Not all states have this law. If you have a recourse loan, that means the bank can sue you for your other assets. If you refinaced you nonrecourse loan then becomes a recourse loan…I hope you haven’t refinaced! If you have a nonrecourse loan you don’t have to worry about tax issues either.
