In other words , according to the accounting equation , as the value of their primary asset ( homes ) fell , mortgage debt initially remained fixed .
Equity also fell , causing the ratio of debt to equity ( a measure of leverage ) to rise .
In other words , according to the accounting equation , as the value of their primary asset ( homes ) fell , mortgage debt initially remained fixed , so equity also fell , causing the ratio of debt to equity ( a measure of leverage ) to rise .