On Tuesday, the Mortgage Bankers Association of America reported that mortgage delinquency posted its biggest jump in nearly four years during the fourth quarter of 1994. The following is excerpted from an analysis by the trade group's economists.

Delinquency rates have generally been falling over the past three years as new, low-interest-rate loans were added during the refinancing boom of 1991-94. Refinanced loans generally perform better than the original mortgages they replace, bringing the overall delinquency rate down. However, it is likely that interest rates have reached their cyclical bottom.

The fourth quarter's deterioration could mark the beginning of an upward trend.

Several factors may account for the turning point. Higher interest rates have signficantly slowed refinancing transactions. Rising rates have also generated a flurry of adjustable-rate mortgage originations, which have historically been associated with higher delinquency rates.

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