The Great Depression of the 1930s was the worst economic crisis in US history. This crisis occurred because of the unbridled expansion of credit by banks and the overproduction of goods and services, whose inventories did not find a sufficient consumer market. Thus, there was a breakdown of companies, banks and families.
They could not sell an overabundance of produce because customers did not have money.
Exactly. The context of the Great Depression caused many people to lose their jobs and also led to a reduction in average American income. Consequently people were poorer and consumed less.
They could not pay back loans, forcing the bank to foreclose on their properties.
Since production did not meet enough demand, the products were not sold and the farmers were at a loss. Consequently, some of them could not repay loans made with the banks. Thus, banks performed the properties that were given as collateral in borrowing.