The other side of the coin

Implications: Good points, but a lack of industry oversight and planning make this a fact of life. Where is the economic planning in the U.S.A.? Relationship building is a key element of business.

Analysis:  The banks/lenders are definitely over-reacting, but there are many builders who are under-capitalized and over-enthusiastic, that should not be in the business of building or developing.  They will be driven from the business, admittedly in a way that impacts other capable builders.  Unfortunately, in our capitalistic society, no one limited the number of builders, not limited the number of loans in the peak days, so now the over-kill occurs.   Without some sort of "early-warning" environment of industry "planners", we will always be in this type of scenario.