Borrowers show signs of strain / Foreclosure process begins for rising number of

WASHINGTON - Mortgage foreclosures climbed in the spring as higher interest rates and energy prices made monthly payments harder for some homeowners.

The Mortgage Bankers Association, in its quarterly mortgage survey released Wednesday, reported that the percentage of mortgages that started the foreclosure process in the April-to-June quarter rose to 0.43 percent. That was up from 0.41 percent in the first quarter and was the highest in just over a year.

The association's survey covers 42.5 million loans.

Even with the increase, the new foreclosure figure is still low by historical standards. But it suggests that some borrowers are feeling pinched.

Foreclosure rates in the second quarter were highest for "subprime" borrowers - people with weaker credit records who are considered higher risks - who have adjustable-rate mortgages.

Rising interest rates can raise monthly payments for people with have adjustable-rate mortgages and that can be a strain if people stretched to buy a home and don't have a financial cushion in their savings accounts.

On the other hand, the survey showed an improvement in the number of late mortgage payments made during the second quarter. The percentage of mortgage payments that were 30 or more days past due for all loans tracked dipped to 4.39 percent in the April-to-June period. That was lower than the 4.41 percent delinquency rate registered in the first quarter and was the best showing in a year.

Doug Duncan, the association's chief economist, said that fundamentally sound economic conditions - including a decent job climate - helped to keep the delinquency rate from moving up in the second quarter.

The latest snapshot of the mortgage market comes as the housing sector is cooling.