Agency delinquencies may have cooled somewhat in the first quarter, but numerous factors continue to hamper home prices and default rates on agency loans may rise again in the second quarter, according to Standard & Poor’s. The agency loans backed by bond resolutions rated by S&P and at least 60 days delinquent or in foreclosure rose to 6.05% in the first quarter from 4.48% a year ago, but fell from 6.57% for the fourth quarter of 2009, according to analysts. Standard & Poor's expects declining mortgage applications, high unemployment, the number of distressed sales and backlog of foreclosed properties not yet for sale to keep home prices down. Without a decrease in unemployment – S&P chief economist David Wyss projects the figure hovering around 10% for the rest of this year – and tangible economic improvement, the ratings service expects agency delinquencies rates to remain high. Wyss also sees difficulties with loan restructuring and delays in the foreclosure process keeping foreclosure inventory high for the next 18 months. And "additional foreclosures could put more pressure on home prices, possibly affecting loans" in agency portfolios, which could increase delinquency rates, according to the credit rating agency. Still, analysts "don’t expect fluctuations in delinquency rates alone to cause ratings action at this time." Write to Jason Philyaw.