US Federal Reserve Chairman Ben Bernanke said today in Chicago, that he is concerned about the rising number of home loan delinquencies in the US. His remarks coincide with a  report in today's Wall Street Journal that soaring housing prices and aggressive mortgage lending have saddled American home buyers with ever greater levels of debt, and early signs are now emerging that more people are unable to keep up with their monthly mortgage payments.

President George W. Bush announces the nomination of Ben Bernanke as Chairman of the Federal Reserve, replacing Alan Greenspan upon his retirement in January 2006. The announcement came Monday, Oct. 24, 2005, in the Oval Office.

The Journal says that recent studies by several Wall Street firms point to rising delinquency rates on home mortgages that were issued last year, a period when lenders were pushing hard to keep business going as interest rates and home prices were rising. The increase in late loan payments comes as more buyers have been forced to stretch financially to afford ever costlier houses in recent years, and many homeowners have increased debt by tapping their home's equity. Analysts say that laxer lending standards on the part of mortgage lenders also resulted in higher debt loads, which some borrowers are now struggling to repay.

The Journal notes that mortgage delinquencies remain low by historical standards but experts worry the trend could worsen. With the housing market cooling and interest rates rising, "by the end of the year you could see a substantial increase in delinquency rates" for mortgages, says Thomas Lawler, a housing market economist.

Mortgage delinquencies historically peak around three years after loans are made, which means some of the more aggressive loans made last year might experience their biggest problems in 2008. The newspaper says that borrowers who took out mortgages in the past two years are likely to be more vulnerable should home prices fall because they could wind up owing more than their home is worth. Twenty-nine percent of borrowers who took out mortgages last year have no equity in their homes or owe more than their house in worth, according to a study completed this year by Christopher L. Cagan, director of research and analytics for First American Real Estate Solutions, a unit of First American Corp. That compares with 10.6% of those who took out loans in 2004.

An analysis by investment bank Bear Stearns has found that delinquencies on loans originated in 2005 were in most cases far higher than on loans issued in previous years at the same point in their life cycle. "The numbers are clearly worse," says Gyan Sinha, a senior managing director at Bear Stearns. The reason: Lenders were "able to generate a lot more volume in the face of rising rates" by loosening lending standards, Mr. Sinha says. "More aggressive lending was clearly taking place," he says.