Actually, many times the house does not sit for long.

The bank is not really in the real estate business, so they simply auction the house off for what they can get, with the remaining balance still being owed by the person evicted.

Then when the person files bankruptcy, the debt gets reduced or discharged and the bank writes it off as a loss.

Of course sometimes the bank is the winning bidder at the auction, so the above still holds true, but then they own the house at the reduced value and sit on it til the market comes back up.

Any way you slice it, the bank will get their money, either directly or through tax writeoff. The newly homeless person is the only one who is going to lose.

BHSC