If the government holds 700 billion dollars of mortgages then they must also
hold the houses behind those mortgages.

So:

Are the houses going to sit empty?

If so, will this cause a large blight? Who will mow the lawn, shovel the
sidewalk and keep the house in repair?

Will the government rent them?

If so, how much more will that cost?

Will they put low income people in them? Squatters?

Realistically, if they're holding onto the houses they will probably end up
knocking them down. Vandals will rip out the copper wiring, plumbing etc,
the repair costs will be astronomical (equal to the price of the house). 700
billion is the tip of the iceberg.