Extract from Safe as Houses, US 2010 real estate chapter:

After every single land price induced downturn, the US government has introduced rules and regulations to make sure it wouldn't happen again. Every upturn the banks and real estate industry find ways around these laws. Watch this time again for 'new-era' lending activities. The higher land price goes, the more inventive lending institutions have to become. They are of course doing no more than finding ways to increase profitability. In addition, real estate mortgages have become highly traded commodities now; in the US alone up to half of all house mortgages have been securitized. In Australia this figure is around 20 percent, but growing. (Securitisation is the word used to describe the simple practice of taking a number of individual mortgages, putting them together as a group, then onselling the now grouped mortgages to another investor.) This is allowing banks to make loans, then off load the risk. So the lending institutions don't actually care how high the land price is; they just make the loan then securitize it into the market. Rising interest rates will at some point find the weak link in this chain...