My friend defaulted on full recourse loan and have a question

[Jimmy Klein]

Ok so here is the summary. A class C apartment was bought by my friend not too long ago. I invested 20% as a silent partner and there are two other partners. The loan balance when the complex was bought was $2 million. The apartment was unable to service its debt about a year in. So the bank tried to renegotiate the principal with us. We took an additional haircut of $200k on principal from $1.9 million (outstanding balance at time) to $1.7 million. The property was still underperforming and the bank sold the note to a private buyer for $1.3 million. The loan is full recourse with personal guarantees. My question, can the bank still come after us even after the note is sold. The bank took a total hit of 600k ($200k from cut and a loss on sale of the note). Are the banks tough in enforcing these full recourse guarantees even if they no longer hold the note? 

[Joel Owens]

Hard to say without looking at every document.

Usually note buyers get the note at  a discount but retain the rights to get the full balance of the note sold to them. 

So the new note holder has the right to pursue all guarantors on the note unless stated otherwise in the sale.

You have to find out what the new note buyers intentions are. How much do they want above what they paid for the note?? Do they just want to own the property?? Are they just looking for the cash flow on the note??

Each state has varying remedies and guidelines for default recovery procedures. A private note buyer might be able to give more workout options as they are not regulated by the same rules as the previous bank. 

No legal advice given.