If a commercial mortgage goes delinquent and faces foreclosure, can the guarantor (in this case, the president of the borrowing corporation) be held personally responsible? Can the lender obtain access to his personal income or savings?
To the extent that the sale of the collateral does not cover the debt due to the creditor the guarantor will be personally liable. The extent to which a creditor can obtain access to the guarntors personal income or savings depends on state law. However, in most cases the creditor would have to obtain a judgment against the guarantor first. However, there are states that allow pre-judgment garnishments and/or siezure of assets.
In short, yes. The purpose of the guarantor is for the bank to have a second person/entity to pursue in the event that the first obligor did not fulfill their obligations under the note. While the bank would certainly need to pursue a cause of action against the guarantor in order to enforce their rights against them, ultimately, the guarantor will be responsible for the deficiency (amount of the loan plus any of their foreclosure expenses minus the proceeds of the auction) and the guarantors assets, if known to the bank, would almost certainly be pursued to satisfy any judgment which the lender would receive against them.
