Late payments on home loans fell for the third quarter in a row, the Mortgage Bankers Association of America said Wednesday. It said 4.16% of mortgages were reported delinquent in the quarter ended Sept. 30 - 19 basis points lower than in the second quarter.

The improvements were widespread. Delinquencies declined 13 basis points to 2.67% on conventional loans, and 28 basis points to 7.83% on the government-insured FHA loans. They also fell in all regions of the country; the biggest drops came in the Northeast and the West.

Economists credited the strong economy, which has kept people in their jobs, plus appreciating home values, for the good news. They predicted that low delinquencies would persist for several quarters.

"Most people have jobs," so they can pay their monthly mortgage bills, said Michael Carliner, an economist at the National Association of Home Builders.

Moreover, rising home prices have bailed out homeowners who might be having trouble with their payments, said Mark Zandi, chief economist at Regional Financial Associates, West Chester, Pa.

"You're going to try to make that mortgage payment if the value of the home continues to appreciate," Mr. Zandi said. And if they can't come through, strapped borrowers have found it easy to sell their homes at good prices, he said.

In contrast to the improvement in mortgage credit, late payments on credit cards have steadily risen this year.

Eileen Neely, senior economist at Fannie Mae, said that may be because the lowest-income borrowers, who have been hard-pressed to make timely card payments, are likely not homeowners.

"That low-income category still can't get mortgages," because they don't have the income needed to pay off mortgage debt, Ms. Neely said.

Mortgage lenders have reported higher delinquencies on low-down-payment loans to low-income borrowers. But Mr. Zandi said high delinquencies on those loans haven't pushed up overall mortgage delinquencies, because low- income loans still make up only a small sliver of overall mortgage debt.

Still, the improvements in mortgage credit may be a harbinger of better news on the credit card front as well, Mr. Zandi said, as the economy continues to be strong and consumers' debt service burdens level off.

The Mortgage Bankers Association said it expects "modest improvements" in mortgage delinquencies over the next several quarters. Falling loan-to- value ratios and low interest rates would tend to keep mortgage delinquencies low, the trade group said. But high consumer debt would hurt mortgage credit, it said.

In the third quarter, delinquency rates fell 25 basis points in the Northeast from the previous quarter, to 4.24% of home loans. In the West, they fell 20 basis points to 3.40%.

In the South, delinquencies fell 22 basis points to 4.84%, and in the North they fell 18 basis points to 3.83%.

Foreclosures rose, however. The percentage of loans in the foreclosure process increased 4 basis points to 1.0%. Foreclosures were up in all regions of the country.

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