It goes back into the lender's possession when payments are not made.

Hank

BANK OWNED – Bank owned property is also called “investor owned” and “R.E.O” (for Real Estate Owned by the bank or lender). These are properties that have passed through the foreclosure process (see below) and are owned free and clear by the bank or lender.

All properties are bank owned till the note is paid in full. The title is in your name however the 1st, 2nd lien holders aka banks own your property. Once the notes are paid in full the banks release a lien on the property.

HOWEVER if the home has gone thru foreclosure proceedings title transferred back to the bank YES it is then bank owned all ownership is bank responsible for.
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Please clarify the question. More details needed. Thanks.