A nonrecourse five-year loan on a commercial building; monthly payments are interest only with a balloon payment at the end. Three years later, a hurricane damages the building; the owner does not repair or protect the property. At the five-year mark, the building's value is lower due to disrepair. Which statement describes the likely outcome?

• A. The owner’s failure to prevent further damage could constitute waste.
• B. The lender can recover a deficiency from the owner personally.
• C. The lender may pursue a deficiency judgment against the owner no matter what.
• D. The loan is nonrecourse, so no deficiency can be sought.

Answer: (A)