Well the bank can't get your future earnings or other assets if you default, but they can get the house. So if the house is worth zero dollars (never true) then you are 5 to 1 leveraged.
There are numerous scenarios where the house is worth less than zero dollars. For example when there's a large overdue tax bill attached to the property.
Or it's in extremely bad repair and will need to be torn down before you can rebuild on the land. If you look at listings for land, a surprising number of them are actually listings for "houses not fit for human habitation".
The land itself is worth about 35-50 percent of the house depending on location. So there are never situations where the value of the house is worth zero.
It is entirely possible for land that house stand on being nearly valueless. Think of really rural or low demand area. And on other hand house it self being expensive to take down. Maybe containing mold or asbestos.
The cost of getting rid of the house - or other liabilities - is sometimes higher than the value of the land itself. There are situations of zero and even negative value.
> in the specific case of mortgages, because they're no-recourse
This varies jurisdiction to jurisdiction. And it isn't really germane to the question of quantifying one's leverage, which is a going-concern analysis.
There are numerous real-life scenarios where a house is worth zero dollars.