It is reverse but only at the end of the process. Problem is that till then they can rip you off (and guarantor) entirely without the court. Until resently individual person couldn't default. Now it is possible, but still extremely hard in comparison with USA (interesting thing: what would happen to guarantor when debtor default?).
PS. there is law problem wich I have to consult with my friend before I dare to use it in this debate: I know that bank can sell property with inhabitants (of course with big discount) if bank own this property. What I don't know is if bank can reposes indebted property (probably yes), and if so, how hard is that.
Ok, I have an update :-)
Yes, usually banks can reposes indebted property (I've been told that banks usually make some registration in mortage deed when they give mortage which gives them priorority in case of debtor problems).
PS. I have to correct myself. It is not bank who has to give surrogate living place but commune (state). But still bank has to wait. Effectively it is long process because of lack of commune property. Secondly, this concerns only some groups of society (social issues etc.).
For this reason the banks, particularly now, are very shy to lend large amounts of money for the purchase of property.
This could be part of it, but I think it is more complicated, for example there is almost no securitization in Poland as it is in USA. So effectively banks carry long term risk, in USA banks just lended money and then via securitization moved risk onto bonds buyers. Besides, many banks in Poland lended borrowed money from the western banks. There was a moment when they simply run out of cash to lend...