It's a contract between the bank and lender. The bank can take your house if you default - that's the agreement both parties sign. When you put 20% down the ban

It's a contract between the bank and lender. The bank can take your house if you default - that's the agreement both parties sign. When you put 20% down the bank puts down the other 80%, making them a co-investor, but as a trustee in the first position. Depending on context it can be a sweet deal for both parties. When times are tough it's time to play the game.