WASHINGTON - With rising interest rates pinching homeowners, mortgage delinquency may be on the upswing.

The Mortgage Bankers Association of America reported Tuesday that late payments posted their biggest jump in nearly four years during the fourth quarter of 1994.

Some 4.15% of all home loans were past due by at least 30 days, up 25 basis points from the previous quarter, the trade group said. The rate had generally been declining for the previous three years.

Though delinquency remains low by historical standards, the recent rise "could be the beginning of an upward trend," said Warren Lasko, the group's executive vice president.

Steady increases in short-term interest rates have boosted monthly payments for borrowers with adjustable-rate loans, economists pointed out.

At the same time, the huge volume of mortgages written during the refinancing boom of 1992 and 1993 are reaching a dangerous age. Delinquency is most likely to occur after the second or third year of the loan, experts say.

In the fourth quarter, the Mortgage Bankers Association found, late payments rose in most parts of the country except the Northeast, which posted a slight decline. The South suffered the sharpest jump - up 37 basis points, to 4.81%.

The rise in delinquency affected a broad range of product types. For conventional mortgages, the rate increased 17 basis points from the third quarter, to 2.64% The delinquency rate on loans insured by the Veterans Administration was 6.36%, up 36 basis points from the previous quarter.

And for loans insured by the Federal Housing Administration, the delinquency rate was 7.43%, up 0.46%.

As falling interest rates eased homeowners' payments over the past few years, late payments fell steadily. The nationwide delinquency rate hit a 21-year low in the third quarter of last year.

Now the tide may be turning.

"It's about time that lenders do become a little more careful in originating loans," said Mark Zandi, chief economist at Regional Financial Associates, West Chester, Pa.

The strains caused by rising interest rates are exacerbated by a large volume of installment debt taken on by consumers last year, said Sung Won Sohn, chief economist at Norwest Corp.

Much of this debt, such as auto loans and credit card balances, also carries variable rates, Mr. Sohn said. With rates rising, consumers have to make higher payments on these loans as well.

He added that he believes a weakening economy will lead to higher delinquency rates going forward.

Charlotte Chamberlain, an analyst with Wedbush Securities, said she is worried about the delinquency outlook for California, home of the nation's largest thrifts.

Despite economic gains in the state, home values are 3% lower than they were a year ago, she said. That makes it harder for owners to build up equity in their homes.

"If these people have significant economic hardships that require them to put off (mortgage) payments, then we're going to have serious problems again," Ms. Chamberlain said. "We're going to start seeing keys being sent back to lenders."

- William Plasencia contributed to this report.

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