The flow of time is convoluted
There's also the idea that he likely has homeowner's insurance on the property. If just his khando burned down, he'd probably be covered for most, if not all, of the "value" of said property at the time of purchase and would wobble away scot free (as is per usual pigroach luck). Unless he found some way to waive that requirement for the mortgage, I figure that insurance would cover him should such a catastrophic event happen and they honor the original value as the amount to pay out for the loss.As far as I understand it. He took out the mortgage so the bank can still pursue it. It doesn't matter if its burned to a crisp they still want their money.
I'm basing this story on something I heard where some guy took out a small loan to buy a boat, the boat either got stolen or destroyed but the bank still wanted their money. Basically like that "fuck you, pay me" scene in goodfellas.