Locally, it is reported that there is a 20 percent drop in the financial market, but considering the case, it is still a high fall.  The effect of this is that the many loans that might have had sense a few years ago are now said to be under- collateralize. When the renewal of the loans come up, the developers will either give out more money into their deals or risk the chance of losing their properties.  Housing experts in the US area saying that almost everybody that has housing loans are all getting concerned about their loans coming due.  Across the nation, commercial real estate values have fallen to an average of 30 percent since the collapse of the financial market about a year ago.

There is a rule that real estate always has to be well financed, if nobody wants to lend money, their values will continue to drop down, and the effect of that would harm the otherwise strong banks.  The cause of the overnight write downs of real estate is that the capital market had already dried down.  If regulators further hamstring the capital markets, we’ll never get back to normal levels.  Federal regulators are now talking to the banks to somehow add capital to their reserves to be able to plan for a possible out-pour of foreclosures.  In some cases, the loans are still providing income for the banks.  But if the property owners are forced to walk away, experts are now asking, who will step in and buy the foreclosed property.