Mortgage industry experts are keeping a wary eye on skyrocketing personal bankruptcy figures.

In the first four months of 1996, bankruptcy filings increased 27%, to 318,893, reports MasterCard International. This figure may signal that delinquency rates will be soaring.

"High bankruptcy rates usually mean that mortgage delinquencies and foreclosures go up," said Andrew Jones, vice president of residential mortgage-backed securities at Duff & Phelps, the New York-based rating agency. Mortgages are increasingly risky assets of which to base securities, he noted.

Most often, a foreclosure closely follows a customer's declaration of bankruptcy, Mr. Jones said. Sometimes, consumers file for bankruptcy as a way to stall the foreclosure process. Mr. Jones said such tactics are particularly effective in New York, New Jersey, and Pennsylvania, where courts are more lenient and borrowers are often very sophisticated.

High bankruptcy rates are baffling economists because they are running in tandem with a strong economy and low unemployment.

An explanation may be found in consumer's increasing willingness to take on debt, says Kelly Matthews, chief economist with First Security Bank of Utah, Salt Lake City.

Borrowers are taking out heavy mortgages that are stretching their budgets tightly, he said. Add on consumer and credit card debt, and often individuals have little leeway to deal with any sort of fiscal catastrophe.

"Here in Utah, our economy is as strong and vibrant as anyone can imagine, and still you see people getting into financial problems," Mr. Matthews said.

Some economists, though, are questioning the common perception that consumer debt is out of control. An increase in the number of bankruptcies filed can be partially attributed to an increase in the debt ceiling, notes one economist.

"There has been a misimpression that consumers are head-over-heels in debt, and are going to drag the economy down with them," said Lyle Gramley, consulting economist for the Mortgage Bankers Association of America.

Delinquency rates are a better indication of consumers' economic health, he said. Currently, overall consumer loan delinquency rates are at 3.28%, 21% below their historical high in fourth-quarter 1991.

"Mortgage lenders should not let this bankruptcy figure bother them," said Mr. Gramley. "It's clear that competition is fierce, (and) there are no doubt some lenders who have become lax in their loan practices."

But, vunerability to bankruptcies and foreclosure varies from case to case. "Lenders should study their own delinquency rates," Mr. Gramley said.

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