There is another major sticking point to non-recourse loans that I do not see getting discussed. I mostly sell real estate however I have done loans as part of my business. With loans I cautioned every client of mine regarding IRS form 8821 (I believe this is the right form no., I do not have a file in front of me to verify). Anyhoo this little gem is included in every closing package and basically gives the lender permission to pull your tax records at a later date.
If the borrower begins to default on payments and the lender surmises that the borrower exaggerated their income on the application then the lender can exercise the IRS form. If their exaggeration suspicions are verified then the lender has a fraud claim against the borrower. At this point I think you can throw the entire non-recourse status out of the window.
