Moody's Economy.com and Equifax Inc. report a jump in mortgage delinquencies to 2.51 percent in the fourth quarter of 2006 from 2.33 percent during the previous three-month period, a trend that Economy.com chief economist Mark Zandi attributes to rising monthly payments for borrowers with adjustable-rate loans.

In order to avoid the costs and hassles associated with foreclosure, some lenders are taking a more active stance in assisting financially distressed customers. Citigroup Inc.'s CitiMortgage subsidiary is informing borrowers of interest-rate adjustments several months in advance and contacting those whose normal payment habits have changed, while Bank of America Corp. is calling borrowers who are most likely to face payment difficulties before they become delinquent and allowing some to refinance at lower interest rates. Others are letting borrowers tack missed payments onto their loan balances. Additionally, lenders are reporting double-digit increases in short sales, which enable borrowers to sell their properties for less than what they owe and have the balance forgiven in order to preserve their credit ratings.