The Hartford, Conn., metropolitan area had the nation's highest delinquency rate at yearend on home loans originated in 1994.

Some 0.36% of the dollar amount was delinquent for at least 30 days. The next-highest rate for a metropolitan area was Riverside, Calif., where homeowners had natural disasters to contend with last year.

Jeffrey Briggs, executive vice president at Centerbank Mortgage Co., Waterbury, Conn., said that Hartford has been a very competitive market, with lenders offering low teaser rates on adjustable mortgages.

Centerbank has not encountered a high rate of delinquent loans in Hartford, Mr. Briggs said, but he added that his organization had stood clear of the pricing competition.

"Payment shock shouldn't be a big deal," he said, "but catastrophic things may."

He was referring to layoffs last year at Connecticut military contractors and in the insurance industry, which he said "resembles the banking industry these days."

These layoffs, coupled with a severely depressed real estate market in the Northeast, hit Connecticut hard.

Last August, initial rates for one-year adjustables in Hartford averaged just 5.29%, compared with a national average of 5.7%. With the local economy still sluggish last year, moves in or out were relatively few, so lenders scrambled to make loans.

Hartford is a big hometown for corporate headquarters. Because their workers move so often, borrowers tend to be more concerned with initial pricing than with whether they can afford a loan over time.

ARMs tend to have higher delinquency rates than fixed rate loans, Mr. Briggs said. So with last year's competitive ARM pricing, it is possible that many of the borrowers would not have qualified at a less competitive time.

At yearend, 0.92% of adjustables originated in Hartford last year were delinquent. So were 1.60% of the Veterans Administration loans written that year; delinquency is generally high on VA loans, too.

The Hartford market was not always so volatile. Yearend-1993 delinquency on loans written that year were comparatively low, and by last December only 0.24% of those loans were delinquent. The highest delinquency for these 24-month-old loans was in Los Angeles, 1.05%.

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