You have that same risk if you paid it for the house lumpsum at the beginning. You bought it at a set price and its value fluctuates.
You still have the option to continue to pay the mortgage payments and pay off the loan, regardless of the current value of the house.
I'm not in US, but I believe they can reduce their own risk by using debt to buy a house. They can put, say 10%, in equity. If the real estate market crashes, the lose that 10% and walk away, leaving the bank with the house.
You still have the option to continue to pay the mortgage payments and pay off the loan, regardless of the current value of the house.
I'm not in US, but I believe they can reduce their own risk by using debt to buy a house. They can put, say 10%, in equity. If the real estate market crashes, the lose that 10% and walk away, leaving the bank with the house.