Likely NOT the landlord's personal domicile's mortgage, but the mortgage on the rental property itself. Landlords with mortgages on their rental property can go upside down on their notes too.
If you can't bear any risk of losing money perhaps you should buy money market funds instead of real estate at 20x leverage.
I bought a house just before the financial crisis and a decade later needed to move but I was underwater. I didn’t have enough money to sell it so I rented it out.
how did this not break your mortgage agreement? most private mortgages have a clause that states the mortgaged property will be your primary residence. specifically. it is to prevent private mortgages being obtained for rental properties.
Shrug. It never came up. I was all squared away with a good legal document for the lease, verified renters insurance, all that. Never even occurred to me the bank might take issue with it. Oh well, no harm done.