Supposing you buy a property worth 1,00,00,000 as your residence. You take a mortgage on this property and get 80% funding. Thus you would get 80,00,000 and 20,00,000 is your own contribution. Now, let's say the property prices falls to 80,00,000 in the market. As per banking rules, the bank will be free to give a margin call to you as its exposure is 80% of the market value of the property and not the purchase price. Thus 80% of 80,00,000 would be 64,00,000. The bank will ask you to deposit 16,00,000 into your mortgage account. After you have done this, your investment in the property will stand at 36,00,000 and the banks exposure will stand reduced to 64,00,000. If the prices keep falling, the bank will keep issuing you margin calls and keep maintaining its share at 80% of market value. There will come a time, when your exposure will be equal to the market price and you will still owe the bank a substantial amount. Thus your property would be called under-water and many people would walk away from such a property by handing over the property to the bank. This is what exactly happened in 2008 in the United States when the mortgage bubble burst. In our case, the bubble may burst anytime soon given the dismal job scenario and falling real estate prices. The only difference in our case is that there is a cash component in most deals. This cash (black) component provided additional cushion to the bank! Your investment in black helps the bank to avoid making margin calls. But if the downward spiral continues, the bank will have no option but to start making the margin calls. And that gentlemen will be time when real shit hits the fan.