You pay the mortgage,you keep the house,you don't pay the mortgage,you lose the house.
Yeah, that's what lead to the Great Recession. A whole bunch of people bought houses with little or no money down in the expectation that their houses would increase in value and when the housing market tanked, they lost their jobs and then their houses.
Except the taxpayer is backstopping the loss in the case of default if it’s a government issued or backed loan program.
The mortgage holder loses nothing. They get to live in a house paying probably less than it would cost to rent a comparable house and if they default, they lose no personal money. They have no money invested in it.
