Chicken/egg. Real estate became inflated due to the crap loans.
Crap loans were a factor, but real estate assessment guidelines being uncoupled from indexing against the local population density, the local median income, and the total local housing supply played at least as big a part in this - and that was done under Carter. There was a time when the process made sure that a bank which was federally insured was not allowed to make loans on property greater than what the property could reasonably bring as collateral.
It is my belief that the current situation happened by design and the roots go back at least to the mid seventies and followed a step by step plan.