Mortgage lenders don't care much when the house prices start to fall. They are only interested in the borrowers ability to pay.
If they would allow less, their business would dry up. Their business is to own houses without equity risk and collect rent (interest payments).
Actually the houses have been moved to the possession of the mortgage lenders (modern landlords) and the borrowers are just modern tenants. But note that the equity risk is transferred to tenants.