Then we can talk about commercial real estate. All of those big glass buildings, shopping centers, etc. Those places are bought up by guys whose only business is to rent them out. Then you have businesses paying rent. Well what happens when the businesses fold and stop paying? The owner can't make mortgage but the banks is not really incentivized to repossess the place because ... who they gonna sell it to? Some other guy who also offers it for rent to the same businesses that don't exist?

The bank has essentially 2 options:
1. Stick with the current owner, let him skip mortgage payments, lend him more money to stay afloat and hope for a better future
2. Repossess the place and put it up for auction, and recoup 50% of your loan.

Right now, banks are choosing #1 "extend and pretend", but these properties are NOT worth what is owed on them.