Here is something I was saying to my friends with a mortgage... I believe there is an 80% loan to value ratio (or similar) within loan agreements. If the value drops below this level, then the banks have the option to request additional money to boost this level. I don't think this was exercised in the 1990s style crash, but imagine if this happened this time.
How many home loaners would need to force sell to make up for this and then be left with a massive debt thereafter. Another friend told me that the Oz banks are now selling their housing debts to foreign companies and removing the obligations off their books. Imagine that these companies start to call in loans.
I am not sure the validity of either, and would like your take on this.
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