How do mortgages work when the government forces people out of their homes?

Sometimes governments kick people out of their homes. Let's say the USA kicked a guy out of his house and tore the house down. I know that they pay the guy a generous amount for it.

But what happens to his mortgage? Can the government tell the bank "this mortgage is done, here's some money?" Does the government make monthly payments? Do they pay the cancellation fees as per the mortgage (even if they are outrageous)?
Added (1). Fozzie, your answer was interesting, but 95% of it was irrelevant.

Can you give more details on the actual answer?

Say 150K was owed on the mortgage, and the fee for paying the mortgage off immediately was 50K. Would the government pay 200K then? What if the mortgage was crazy and had a fee of 500K?

What if the mortgage was from a company in some crazy foreign country and the fee was $100 billion. What if they didn't allow the mortgage to be paid early at all?

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