ManyBankshave beenwilling torollloansoverandignorebreachesofloan-to-value covenantscausedby fallingvalues (a strategyknown as "extendandpretend") rather than force asale.
If it was worth more, a borrower could pay off the loan and get the stock back, rollover the loan into a larger one or ask the stock be sold and take profits.
Banks have picked up some of the slack, but many are reluctant to lend because their capital bases are already suffering from loan losses, and they are uneasy about the ability of many customers to rollover the paper.