Getting a mortgage, what do you think?

Hi all... In a very very bad credit situation and looking for a mortgage loan when someone has a co-signer that has a house that is payed off and is willing to use it for collateral for the other people to get a house will that work? or will the bank still only offer a loan with a high down payment? the house the co-signer has is worth more than a house the bad credit people are looking for. Any info on that would be great, why this is a good or a bad idea??? what could happen for the bad credit people. Thanks for any info. This is in Canada. I hope this made sence lol