Earlier this week, the Mortgage Bankers Association had some encouraging news to report: After a runup in the second half of 1995, late payments on home loans dipped in the first quarter.

But a crucial piece of information disclosed by the trade group was overlooked. Last year's rise in mortgage delinquencies, it turns out, was far worse than anyone thought.

Economists at the association discovered last week that some lenders hadn't been reporting on delinquencies. The economists got the missing information - which covered 1.5 million loans - and quickly realized that late payments had been climbing faster than previously believed.

Plans to release first-quarter data at a June 13 press conference were shelved while the economists recalculated last year's numbers.

The increase in delinquencies in the third quarter was 26 basis points, about triple the nine points previously reported. That put delinquencies at 4.41% of all loans.

Delinquencies rose another seven basis points in the fourth quarter, putting them at 4.48%, or 23 basis points greater than originally reported, and the highest level since delinquencies hit 4.59% in the third quarter of 1992. The association said this week that delinquencies declined slightly in the first quarter, to 4.46% of total home loans.

The earlier reports of only moderate jumps in late payments were in contrast to sharply worsening credit card delinquencies. Experts say that as early as last summer highly leveraged homeowners began to feel the pinch of a slowing economy and the growing reluctance of credit card issuers to roll over existing debt on easy terms.

As credit card lenders cut back on soliciting new customers by offering large credit lines, they "cut off some marginal households, particularly those who have been using one credit card to pay off their existing debt and then moving to the next credit card to pay their even larger debt," said Mark Zandi, chief economist at Regional Financial Associates.

The effects of tight credit card debt rippled into the mortgage sector. Hard-pressed consumers were forced to juggle mortgage payments with other debt, and this pushed up mortgage delinquencies and bankruptcy filings, Mr. Zandi said.

Although the trade association recorded the small first-quarter dip in late payments, economists said they expect deterioration to continue until yearend.

David Lereah, chief economist of the mortgage trade group, said the two- basis-point drop in first-quarter delinquencies suggests "we may be able to see some light at the end of this tunnel."

Though worsening more than previously reported, mortgage credit did not deteriorate as sharply as consumer credit last year, Mr. Lereah pointed out. It would likely take a full-blown recession for mortgage delinquencies to reach 5% of all loans, a level he said he would regard with alarm.

The seeds of the latest crop of high delinquencies were sown in 1994 and 1995, when overstaffed lenders, in a bid to increase volume, stretched their standards to make loans to riskier borrowers whom they would have passed up during the refinancing boom of the preceding two years.

One measure of that trend has been the rise in loan-to-value ratios. With those loans getting older and entering their prime delinquency years, late payments have risen.

Economists said the revised delinquency reports also underscore the growing gap between well-off borrowers and those at the lower end.

Delinquencies on loans insured through the Department of Housing and Urban Development's FHA program, which is favored by first-time and low- income homebuyers, worsened more than for any other category of mortgage.

In the third quarter, delinquencies on FHA loans shot up 45 basis points, to 7.84% of all loans, and by the first quarter of this year 8.19% of all FHA loans had late payments.

By contrast, delinquencies on conventional loans rose 24 basis points in the third quarter, to 2.91%. After climbing another 10 basis points in the fourth quarter, delinquencies on these loans fell to 2.86% in the first quarter.

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