Late payments on home loans have risen for two quarters in a row, sparking fears that lenders may be poorly prepared for any economic slowdown.

The Mortgage Bankers Association of America reported Wednesday that 3.11% of home loans were past due by 30 to 59 days at the end of the first quarter, up from 3.02% at yearend. Rises in these shorter-term delinquencies sometimes presage deeper problems in credit quality, experts said.

"At this point in the economic cycle, delinquencies should be falling, and they're not," said Mark Zandi, chief economist at Regional Financial Associates, West Chester, Pa.

"When the economy doesn't cooperate, we're going to have much higher delinquencies, foreclosures, and losses," he warned.

Serious delinquencies-60 days late or more-have yet to rise. In fact, 90-day delinquencies dipped a bit in the first quarter, the trade group said. As a result, the total mortgage delinquency rate climbed just four basis points, to 4.36%. It had jumped 14 basis points the previous quarter.

Though economists are concerned by that rise, they note that total delinquencies are still lower than in the first quarter of 1996.

"These levels are not a big deal," said David Lereah, chief economist at the Mortgage Bankers Association.

"My only caution is if the economy ever begins to turn down into a recession, these numbers will only get worse," he said.

Home loans have been an island of calm amid escalating late payments on credit cards and rising personal bankruptcies.

Experts said that mortgage lenders have been shielded because borrowers place a higher priority on paying their monthly mortgage bill. Rising home prices also have stemmed mortgage delinquencies.

But Mr. Zandi and others said that the mortgage industry's delinquencies could well get worse over the long term.

For one thing, mortgage lenders have sharply increased low-down-payment home loans to low-income borrowers, partly in response to political pressure. Early signs are that late payments on these loans are significantly higher. As the loans mature into their prime delinquency years, late payments on mortgages will rise sharply, Mr. Zandi said.

Home loans to borrowers with damaged credit-a hot product these days among banks and mortgage companies-are also weakening credit standards and will contribute to higher delinquencies as the economy weakens, he said.

In the first quarter, late payments rose on all types of loans. Among conventional loans, 2.88% were overdue, up from 2.74% at yearend.

Among FHA-insured loans, 8.18% were overdue, up from 8.03%. Of loans insured by the Veterans Administration, 6.97% were overdue, up from 6.77%.

Foreclosures also rose. Lenders began foreclosure proceedings on 0.37% of all loans in the first quarter, up four basis points from the previous period. The percentage of loans in foreclosure at the end of the quarter increased five basis points, to 1.08%.

Foreclosures in California were at a record level. Almost 2% of all loans in California were in foreclosure at the end of the first quarter. To Mr. Lereah, that suggests that the long-awaited housing recovery in California still hasn't arrived.

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