More American homeowners are choosing not to pay their mortgage, a phenomenon known as strategic default. FICO has built a predictive model that predicts whether a borrower will default on their mortgage. Andrew Jennings, FICO's chief analytics officer, shares the FICO Labs findings and the profile of a strategic defaulter in this video.
The motivation for a strategic default may depend on how far a borrower is underwater.
Having a mortgage that’s twice as much as the value of a home could be somewhat discouraging.
The prospect of being stuck with a losing investment that may not reach a break-even point for 10 years or more may be enough motivation to take a walk.
Posted by: Gmac Home Loans | 09/26/2011 at 04:30 PM