Those that follow the mortgage industry say banks could face hundreds of millions of dollars in losses through loans to homebuilders and other developers. With commercial and residential real-estate prices declining, lenders of all sizes face a growing number of loan defaults from builders unable to sell houses and from developers whose properties are currently less desirable than originally anticipated.

Construction and development loans are loans made to builders for properties such as strip malls, office buildings and residential developments. They have been a key source of profit for small and midsize banks. The percentage of those loans that are 90 or more days past due rose to nearly 3.2 percent at the end of 2007, up from less than 1 percent a year earlier, and is now at levels not seen since the early 1990s.

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