Abstract . The purpose of this paper is to focus attention on the question of safety of banks that finance actions in the real estate market. Negative effects of recession in the real estate sector are reflected in the banking sector. The intensity of the problem depends greatly on the level of risk at which credits were managed just before the turning point. Apart from complying with the standard regulations governing the banking sector, the activity within the market in question spawns the necessity for creditors to identify a given environment and the related risk. Therefore, it can be concluded that one of the options of securing oneself against the loss of assets is to conduct a reliable market tendencies analysis and to continuously monitor information coming from this market. It should be noticed that mortgage loans are a great source of significant information on the issue of repayment efficiency. Based on this information one can formulate conclusions concerning the validity of crediting terms and coditions. One can also estimate the probability of non-payment of loans. The credit risk associated with secured mortgage claims determined by banks strictly depends on capabilities of potential debtors, but also on the value of a property. It is therefore important that creditworthiness should be determined correctly in the current economic circumstances, and the market value of a mortgaged property should be accurately estimated.

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