I learned something

I learned something the other day that I didn't know about before. It's something you might want to stick in your head for later reference if you didn't know it either.

Fact one: In all but 13 states in the country, purchase money mortgages are non-recourse. In other words, if your mortgage was taken out at the time you bought the house and if you live in any of the other 37 states, the lender has no recourse to you or to any of your assets except your house. If the value of your house happens to fall below the value of your mortgage loan, you can simply abandon the house and send the keys back to the mortgage servicer. Nobody can come after you or garnish your wages.

Fact two (this is the one I didn't know): No matter what state you live in, if you refinance your mortgage (for example, to get a lower rate), the new mortgage lender will have recourse to you, your assets, and your income, even after the house has been repossessed. The state laws calling for non-recourse loans apply only to purchase money mortgages.

It's too late for me, since I've already refinanced three times, but if you haven't refinanced your mortgage loan since you bought the house, you might want to think twice before doing so.