Read my post 15. They simply reposses it, clean it up and resell it.
I hope this backfires and the illegals and other high-risk people they want to recruit end up destroying the houses they "own." I have heard stories where people who know they will eventually default on a loan just let their property fall apart -- they treat the property like the worst slob renter from hell would. They mash up the furniture and bang holes in the walls and anything not firmly attached is stolen (people even steal the pipes to sell for drug money). I hope these greedy lenders who want to offer deals to illegals get piles of rubble when it is time to reposess a house.