Like the “full recourse” list, this second type of “bad boy” liability (for Lender’s “loss or damages”) has grown significantly “longer” during this great downturn.

Combine full recourse liability with the list below (loss or damages liability), and the “no liability” deal looks like this:

Here’s my current version of the list of bad boy recourse events that trigger liability for Lender’s losses or damages (but NOT for liability for the entire loan) due to the following:

• any mechanic’s or materialman’s lien
• failure of Borrower to pay any of the property taxes
• failure of Borrower to maintain the insurance (and reimburse Lender for forced placed insurance)
• any fraud or material misrepresentation, gross negligence or willful misconduct by Borrower or any employee, contractor, agent, or person in control of Borrower in connection with the ownership or operation of the property or any aspect of the loan
• misapplication, misappropriation or conversion of (i) any insurance proceeds paid by reason of any loss, damage or destruction, (ii) any condemnation awards, or (iii) any rents following a default or (iv) any lease security deposits, lease advance deposits or rents collected in advance (including lease credit enhancements, such as a letter of credit)
•  any collateral taken from the property by or on behalf of Borrower, and not replaced with collateral of the same utility and of the same of greater value
• following foreclosure, any loss or damages incurred by Lender resulting from the failure of Borrower to deliver or surrender the property to the foreclosure sale purchaser
• any loss or damage from (i) waste to the property caused by intentional acts or intentional omissions of Borrower, or the removal or disposal of any collateral after a default, (ii) any act of arson by borrower or any person affiliated with or in control of Borrower; or (iii) the seizure or forfeiture of the property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing by Borrower or person  affiliated with or in control of Borrower
•  any fees or commissions paid by Borrower (or on behalf of Borrower) after the occurrence of a default to any person (directly or indirectly) affiliated with or in control of Borrower
• from any failure by Borrower to permit on-site inspections of the property
• from any litigation or other legal proceeding related to the loan filed by Borrower, or any person (directly or indirectly) affiliated with or in control of Borrower (after a default), that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the efforts of Lender to exercise any rights and remedies available to Lender under the loan
• from the failure of Borrower to fully perform any of the Borrower’s indemnification of Lender under the loan
• Borrower contests, delays or otherwise hinders or opposes (following a default) any of Lender’s enforcement actions or remedies
• my new favorite: failure to furnish access to on-line services (as a co-admininstrator), and then after a default, to relinquish full control to Lender

And, of course, under both the full recourse events and the loss or damages events, Borrower is liable for Lender’s enforcement costs.

So, back to my point: at what point does all of this simply equate (on a practical level), to a full recourse (but dressed like non-recoruse) loan?

Please share your perspective or experience below.

"Enforcement Costs” means all costs, reasonable attorneys’ fees, legal expenses and other costs incurred or expended by Lender in collecting or enforcing any of the Guaranteed Obligations or due to any default in the performance of the Guaranteed Obligations or in enforcing any right granted hereunder or under the Loan Documents.