Mortgage Delinquency Rate Climbs to 4.36%

The number of Americans behind on mortgage payments increased in the fourth quarter of 1997 to the highest level in nearly two years, according to the Mortgage Bankers Assn. of America. Mortgage delinquencies rose to a seasonally adjusted rate of 4.36% in the quarter, up from 4.26% in the third quarter and the highest delinquency level since the first quarter of 1996, the association said. It was the fourth increase in five quarters. David Lereah, the association’s chief economist, said the increase was concentrated among adjustable-rate mortgages, which account for roughly a fifth of all mortgages. Many adjustable-rate mortgages originated in the last half of 1996 had their first adjustment during the last half of 1997. In some cases, the adjustment was as much as 2 percentage points, resulting in quite a payment shock, Lereah said. However, he said the large number of refinancings in recent months to some of the lowest fixed rates in 30 years should help temper any further increases in the delinquency rate.