In his 1933 inaugural address, Franklin D. Roosevelt stated, "The only thing we have to fear is fear itself." At that time, our country lingered in the depths of the Great Depression. I have been reminded of those words a lot lately. For example, I was talking to executives at a bank that had just been visited by federal finance officials. The bank execs were struggling with the fact that they were being told their portfolio of performing interest-only residential loans had to be converted into five-year amortizing loans. The Feds are concerned about the viability of the loans and therefore want them paid back.

John A. Ritter Ever heard of a self-fulfilling prophecy? Amid the tight credit markets and with the current pace of home and land sales, I can't imagine that most of the borrowers will be able to generate the cash to amortize those loans. So if federal bank examiners push this, they'll create defaults, and then they'll say, "See? I told you these were bad loans."

We've all heard the stories about financial institutions that have been acquired by funds and investors who, having now been stung by the subprime debacle, are cutting off future lending and squeezing current borrowers–or the syndicate investors who say, "Pay me off or else." Come on, guys. Do you really want to try to be home builders, developers, or land owners? Really?

Both our industry and the American economy are fundamentally strong. This country is still creating jobs, the population is still growing, and people will need shelter. True, we have hit a perfect storm that has knocked us around, and we still have a rough sea ahead to navigate.

But when this thing turns around, we'll have pent-up demand, limited new-home inventory, lower interest rates, and fewer subdivisions. Home builder velocities will pick up, incentives will disappear, and builder profits will soar because they have written down their basis on the projects that will be selling. Is that 2009 or 2010? No one knows, but that time will come.

There are billions of dollars in land funds right now that are snatching up land deals at 40 percent to 60 percent of par. When they put that land back on the market in two or three years, in order to generate their 30 percent internal rates of return, they'll be demanding par or par plus 20 percent to 30 percent. It will become clear that, while the media thinks they are lowering the bar on land values, they will actually raise the bar when the market rebounds.

This reminds me of the late '80s when we were in the midst of the savings and loan crisis. Those companies, financial institutions, and investors that kept their heads and weathered the storm and those that fearlessly jumped into the breech to acquire RTC assets made fortunes in the subsequent years.

When recovery comes, will we be proud of how our government, our financial institutions, and our own industry dealt with this? Will we say that we didn't let the short-term situation affect our long-term view and that we were patient, thoughtful, and logical? That we focused on the positive and so inspired confidence in our lenders, investors, and home buyers?

Or will we say that we panicked and ran around like Chicken Littles–and so spread the panic, exacerbated the fear, and perpetuated the uncertainty?

Sometimes, when it seems like you're in the bottom of a well, and it's dark and cold, you have to work hard to remind yourself that when you climb back out the sun will still be shining, the grass will still be green, and the birds will still be singing.

It is going to be a hell of a lot easier to climb out of this if our government, our financial institutions, our investors, and all of the rest of us keep our heads and do not succumb to "fear itself."

–John A. Ritter is chairman and CEO of Focus Property Group.