You don't pay any taxes because nothing is forgiven. You lose the house. The loan is secured by the home but nothing else, as opposed to being secured by the ho

You don't pay any taxes because nothing is forgiven. You lose the house. The loan is secured by the home but nothing else, as opposed to being secured by the home and yourself as a guarantor. Non-recourse loans are the standard across the entire country. It has nothing to do with jurisdiction, at least not within the U.S. The people who get regular, recourse loans are speculators, people buying 2nd or 3rd homes, and commercial developers. This has to do with the terms of the mortgage contract, not with the law. Some states do have laws which regulate mortgage matters, but those typically only matter when there are problems with the contract, such as when people sell directly to each other (e.g. a prior owner holds the mortgage). The vast majority of people purchase homes through a bank, for which the standard terms are non-recourse.