WASHINGTON — Federal regulators issued a statement today urging financial institutions to work with homeowners in danger of falling behind in their mortgage payments as interest rate rise.

The federal financial institutions regulatory agencies, NCUA among them, said they "encourage financial institutions to work constructively with residential borrowers who are financially unable to make their contractual payment obligations on their home loans. Prudent workout arrangements that are consistent with safe and sound lending practices are generally in the long-term best interest of both the financial institution and the borrower.

"Many residential borrowers may face significant payment increases when their adjustable rate mortgage (ARM) loans reset in the coming months. These borrowers may not have sufficient financial capacity to service a higher debt load, especially if they were qualified based on a low introductory payment."