Well if you end up failing initiation to any of the factions you become "factionless" which basically means that you are homeless. So you live on the streets and aren't treated very well by the other factions, minus Abnegation who try to help them. And for you second question I assume you mean if you decide to stay with your faction you were born into. And then you would just go through initiation into that faction. You're not treated any differently then a faction transfer.
