The mortgage is an agreement between 2 parties. Why should 1 party get to break their side of the deal?

Could the bank kick you out even if you made payments on time?

"I know that's not the deal we made, but so what? We weren't serious about today anyway!"

Most mortgages are packaged as securities. The bank is only servicing that debt for the lender, which is a bond holder in most mortgage scenarios. It could be held by the same bank, but likely many different bond holders.

Failure to adequately service those mortgages for bond holders could be a violation of fiduciary duty to those bond holders.

Even if the bank held all of the debt, it would be irresponsible to allow borrowers to skip payments.

Banks don't fail for lack of assets, usually it is lack of liquidity, i.e.-money not coming in on time.