“... what happens when the property used as collateral for these loans is suddenly worth much, much less than these banks valued it at when they made the loans ...”
A bit off-topic but this scenario is going to part of the Ds attack on PDJT’s tax situation, that his properties are overvalued so his tax bill deductions are over-stated. Hence he is cheating the tax man.
IF his deductions for property taxes are overstated-—that is the fault of the TAXING Authorities-—NOT Trump.
IF I PAY MY PROPERTY taxes & that is a legally deductible expense-—I HAVE NOT BROKEN ANY LAWS.