The buyer can walk away from the house. However, the lender may go after them. Honestly I’m embarrased to say I’m not sure what the lender can do besides taking the house. Of course, the borrrower will have a foreclosure on their credit report which is a disaster. Also, I think I read somewhere that the borrower may have a huge tax bill from the IRS. Maybe an accountant can chime in here, I’m not sure what the IRS will do.
