Of course, in real life, almost all bank mortgage contracts have this clause, so if the lender defaults, the bank can exercise the mortgage right. And because loan and mortgage are two kinds of relationships, if your house is repossessed, you can't pay off the loan, and you need to continue to pay off the remaining loan.
Simply put, in theory, if the house price plummets and you can't make up the difference, the house you bought with the loan may be taken away by the bank.
If you live in mortgage to buy a house, there will be two relationships between you and the bank: one is the loan relationship, where you apply for a part of the loan from the bank to buy a house for which you have paid the down payment; Second, the mortgage relationship, the bank gives you loans, and the house is the collateral that urges you to repay the loan to the bank according to the contract.
Suppose the house price falls and the value of the house (collateral) is less than your loan amount:
From a legal point of view, the bank has the right to ask the lender to increase the collateral, but only if the value of the house is reduced due to the lender's own fault. (Refer to the Property Law) In other words, if it is because of the general decline in market prices, it does not belong to this situation. Therefore, when house prices plummet, banks have no right to claim back the property.
From the point of view of the contract, if both parties stipulate in the contract that the bank has the right to request supplementary guarantee, the agreement is effective without violating the mandatory provisions of the law. Property buyers must supplement the collateral according to the contract, otherwise the bank has the right to exercise the mortgage (that is, to recover the house).