The drop in value is just a paper loss unless you have to sell.
The problem isn't value, its that folks borrowed money that they had no ability to repay.
At the same time no one plans on home property values dropping 40%, at least not in this country.
This is all of a piece with the illegal alien importation scheme. Builders found they could use cheap Mexican labor to construct homes, and did so by the millions.
The new homes undercut the value of the existing stock of homes.
We can still "punish" the builders who hired illegal alien laborers by identifying the houses so built, then burning them to the ground until we reduce the market sufficiently to bring home prices back into line with debt.
NOTE:(Henry Wallace, Secretary of Agriculture under Franklin Roosevelt, used the AAA to kill 5 million baby pigs. This is very similar to Nancy Pelosi's scheme to kill to kill 5 million baby humans to "stimulate" the economy.)
NOTE:(Just in case you thought I was not just cynically recycling New Deal stupidity ~ which I was ~ which Nancy is too, but she's Speaker of the House, and I'm not)./s