> If you can't pay the bank, the bank will repossess the properties. Basically, the bank's loan is converted to equity. This also means the bank can lose money

> If you can't pay the bank, the bank will repossess the properties. Basically, the bank's loan is converted to equity. This also means the bank can lose money on the deal, because it's possible that even selling the building leaves them in the negative, for instance if it somehow becomes worth a lot less. This is absurd. For the bank, because the bank is virtually guaranteed to lose money. The only reason "owners" can't pay the bank is that the lease prices have dropped (usually by a lot). If the lease prices have dropped, the value of the property has dropped, and if it can't be refinanced the value of the property has dropped below the capital owed. So the bank gets the property, but only if that doesn't solve the problem of the money owed. In other words, this is a useless guarantee. Furthermore, the owners will never pay back the loan. Rather they'll buy more properties. So this is like a lot of business loans: an effectively eternal ("interest-only") loan. Any bet that the market will never go down has a zero chance of being correct. And of course, as demonstrated yet again this will happen to a lot of properties at the same time, magnifying the losses. Why are banks allowed to make that bet? For society, because the owners of the building don't contribute anything. They don't contribute capital, which is what defines ownership in capitalism. They don't contribute admin work (that's outsourced). The only thing they have is clout with the banks, sometimes city hall, built up trust, or "goodwill". In other words, they are in their position because of corruption. Also for society because no owner will risk his personal wealth on something like a building. It will be packaged as a limited liability company. So when it goes bankrupt, the owner at most loses an income stream that was probably going 99% to interest payments anyway.