"Strategic" Mortgage Defaulters

A new study of mortgage defaults using a sample of 24 million individual credit files has found much higher rates of "strategic" default than previously assumed by the industry. A strategic defaulter is someone who goes directly from a good payment history to no mortgage payments at all (in contrast to many financially troubled customers who continue to try to make payments after they have fallen behind on their mortgage and other accounts). Interestingly, those with high credit scores are 50% more likely to be strategic defaulters compared to those with low credit scores.