In contrast to the term “home owner,” home debtor is reserved for those who will seemingly never be able to pay off the mortgage(s) on their home, or who have already defaulted.

Most Americans live in homes that they pay on, but are still primarily owned by the bank that loaned them money. Banks have insurance to protect them against mortgage defaults. Home mortgage loans are the primary way that Americans by homes today.

It is exceedingly rare for more than 20% of a home to be paid off at the point of sale, and most people start with significantly less equity than that — if any. When the costs of the home become overwhelming to the home-buyer, and they no longer have advantageous options for refinancing or paying off their home, they are sometimes referred to as home debtors.

Many Americans lost their homes in the wake of the housing bubble in 2008, when the value of their homes shrunk significantly and they found themselves underwater on their home mortgages. The Federal government started the HARP and HAMP programs in 2009 to help struggling Americans get approved for a refinanced loan.

The Housing and Recovery Act and other legislation has sought to alleviate some of the pressure on home debtors.