No, you can not lose your house. Whoever has the Pit Bull should train it better and always remember Pit Bulls are not dangerous, no breed of any animal is dangerous it is the way the owner treats and trains it. If you have an animal give it a good pat on the head today and treat it like you would treat any other pet or even person.
I think it is the fault of the pit bull owner, if it attacks someone and it is in another person's property. You will not loose your home because of this. The owner of the dog will be forced to cater for the expenses of the person who has been attacked.
It depends on the legislation in your area. Where I live it is now illegal to own a pit bull and so it would come down solely on the dog owner. In other regions where it doesn't matter there is a possibility that the homeowner could be at fault as well, especially if it is proven that the dog owner was a welcomed guest. If my house was on the line I'd be calling a lawyer for sure. I think what is actually going to happen is the dog (pit bull or not) is going to be put down and the owner will receive a small fine.
The owner of the dog has a responsibility to contain it on the property. If it is not registered/licensed to you there should be no legal ramifications on your end. However now that you have a dog that has bitten on your property you may decide if you want the dog removed or if your home owners insurance will be covered simply due to the breed.
Sadly, if you knew the pit owner & allowed him on your property with the dog, your homeowners insurance will be the first thing the victim's lawyer goes after. Not because its your fault, but because it happened on your property & it'll be the easiest accessible cash to pay medical bills, pain and suffering & legal fees. You'll then have to sue the pit owner to get the money back, and the chances you'll recover it all + all attorney fees is very unlikely.
GO GET A LAWYER! You need one to stop the victim's attorney from going after your homeowners insurance. Trust me - it'll be cheaper to get a lawyer now for this than to get one later to go get your money back, not to mention the increase in your homeowner insurance rates. Plus, what's the likelihood the Pit owner has that much cash to pay you? You may be trying to get blood out of a turnip.
If you did NOT give explicit permission that day to allow the dog owner to bring his pet on your property that specific day, make sure that is completely clear with the victim and, if possible, his attorney.
Don't worry about your home - they can't take it away from you for this.
If any dog that is not yours is running loose on your property and harms an individual who is also on your property, the responsibility for any damage lies solely with the owner of the dog. If you have a problem with an "unfriendly" and unattended canine entering your property - call animal control or even the police. It shouldn't happen. Protect yourself from any complications before anything happens. Be firm.