A new study looks are those who have chosen to walk away from home mortgages, and it has a few surprises.
For example: Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores?
Research reported in the LA Times, drawn from 24 million individual credit files, has found that homeowners with high scores when they apply for a loan are 50% more likely to "strategically default" -- abruptly and intentionally pull the plug and abandon the mortgage -- compared with lower-scoring borrowers.
National credit bureau Experian teamed with consulting company Oliver Wyman to identify the characteristics and debt management behavior of the growing numbers of homeowners who bail out of their mortgages with none of the expected warning signs, such as nonpayments on other debts.
With foreclosures, delinquencies and loan losses at record levels, strategic defaults and walkaways are among the hottest subjects in residential real estate finance. Unlike in earlier academic studies, Experian and Wyman could tap into credit files over extended periods to identify patterns associated with strategic defaults.
Among researchers' findings are these eye-openers:
* The number of strategic defaults is far beyond most industry estimates -- 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year's fourth quarter.
* Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast with most financially distressed borrowers, who try to keep paying on their mortgage even after they've fallen behind on other accounts.
* Strategic defaults are heavily concentrated in negative-equity markets where home values zoomed during the boom and have cratered since 2006. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. In Florida it was 46 times higher. In most other parts of the country, defaults were about nine times higher in 2008 than in 2005.
* Two-thirds of strategic defaulters have only one mortgage -- the one they're walking away from on their primary homes. Individuals who have mortgages on multiple houses also have a higher likelihood of strategic default, but researchers believe that many of these walkaways are from investment properties or second homes.
* People who default strategically and lose their houses appear to understand the consequences of what they're doing. Piyush Tantia, an Oliver Wyman partner and a principal researcher on the study, said strategic defaulters "are clearly sophisticated," based on the patterns of selective payments observable in their credit files. For example, they tend not to default on home equity lines of credit until after they bail out on their main mortgages, sometimes to draw down more cash on the equity line.
Strategic defaulters may know that their credit scores will be severely depressed by their mortgage abandonment, Tantia said, but they appear to look at it as a business decision: "Well, I'm $200,000 in the hole on my house, and yes, I'll damage my credit," he said of defaulters. But they see it as the most practical solution under the circumstances.
The Experian-Wyman study does not try to explore the ethical or legal aspects of mortgage walkaways. But it does suggest that lenders and loan servicers take steps to screen and identify strategic defaulters in advance and possibly avoid offering them loan modifications, since they'll probably just re-default on them anyway.
Realtor Liz Miller - Lake Havasu City, Arizona Real Estate
Liz, I think 2010 is going to be remembered as the year of the "strategic default". People in this position know they can repair their credit in a few years whereas it will take a decade to recoup their property's value, if at all. We will be seeing a lot more of this.
Also, I LOVE your promo video. Very well done.
Liz...
Thanks for bringing the study to our attention. I agree with my husband. We'll be seeing a lot of this. I consider strategic defaults to be sound financial planning. But, don't tell anyone I said that. Many do not agree with me on that particular point :)
TLW...ROAR!
Liz I have had a couple within the past few months looking at foreclosures as a way of downsizing before they lose their big house, and they talk openly about it. It does appear to be the next hit to the system, and the banks are expecting it because they are getting overly cautious on new purchases and especially with second home purchases too close to the original property.
Wow good point Ed, purchasing a second smaller home in the area could be a red flag. What will they think of next??
Thanks for the post,
Kristin
Well, there's something to be said for using default strategically as TLW states.
Some people would be better off stopping their house payment earlier than they do when there are no job prospects in their future. I've seen stubborn people borrow even more on credit, or even worse, borrow from friends/family which has the potential to ruin more than their credit score.
I really appreciate the data that you shared. I guess some people do not worry about their credit in the next few years. They may reason that they will be in good company.
I suspect many of these are going to be filing bankruptcy and know they will be qualified to buy a new home within 2 years from the discharge date.
Very interesting blog Liz. I agree that we will continue to see more of this for awhile before things get better. I liked your YouTube video about Lake Havazu!!
I think that NY will see some strategic default in our second home area. Interestingly, I have to say that some of the bank owned are in extremely nice condition- civilized default, absent the anguish? Yikes.
Hi Liz -- This is very sad indeed. I watched your video -- Did you produce that yourself? It was incredibly well done -- the video, your narration, everything!
"But they see it as the most practical solution under the circumstances."
For those who have good credit and are defaulting, they know they can easily rebuild their credit over a period of time. They obviously know how to have and keep good credit. :-) Why would someone with any financial smarts continue to throw away money at a losing investment? I sure wouldn't.
Liz:
This is very interesting. It sounds as though it could actually be premeditated. I wonder if there are any studies on repeat offenders (after they get their credit back.)
Your video is very well-done. What a nice marketing tool.
Liz - This is a real eye opener. It's very well written and worthy of a feature. I think that we're going to see more and more strategic defaults in 2010 as BrokerBryant predicted. The forethought to draw on the home equity line and then default is really something!
Great information, and certainly seems logical given the economic realities in many markets. Thanks for posting! Aloha~ Yvonne
I'm not sure why people aren't filing Chapter 13 Bankruptcy protection. If their credit is going to be ruined, one way or the other -- if they strategically walk, it's ruined -- why not try to protect their home? Unless they don't really give a rip about living there anymore. Putting the property in Chapter 13 excludes it. Might be some way to manage the budget on a bankruptcy plan. Again, if their credit is going to be shot to Kingdom Come anyway . . . why not try to save the home, and wait until the market improves (yes it will take awhile to build back up -- but so will ruined credit scores need a lot of time to build back up!)
Liz - I agree with the consensus, that the level of strategic defaults is likely to continue picking up. I've talked to quite a few people who have been "feeding negatives" on investment property and are running out of reserves, or those who have been holding off on selling waiting for the market to recover then realizing their local market is not going to do so any time soon and they can/will no longer wait. Add to that the rumbles of the next wave of resetting ARMS coming down the pipe, and voila.
Liz: Absolutely superlative article and information. Quite surprising in some aspects. While I understand the dilemma involved with strategic defaults ... my old-fashioned upbringing gets twisted and rankled by the reality of it. It's the old push and pull between doing what's expedient and what's been told to us is moral. Different times calling for different actions? Maybe the answer lies within each individual? I don't know the answer and I'm sure the debate will rage on ...
Again, thanks for the useful information and well-written piece ...
Gene
People are smarter than you think with money. Especially when you have none. It may also be different for the older generations. I am sure culture has a lot to do with it as well. I see little of that here but then we are considered to be backward. Then we did not get to have a big bubble but now have to help pay the price. Gee, we still drill for oil here.
The information here resembles what I see as I work with short sales, and the type of person who keeps trying to make their payments. I haven't had anyone who was strategically defaulting - so far I have had true hardships. Oh, and LOVE the video - great story about Lake Havasu and the camera loves you. Very professionally done.
Hey Liz - Congratulations on your Featured Post! Great post.
Very interesting data, Liz... Thanks for sharing!
This is a great article. My wife and I are the perfect examples of this phenomenon.
It really is a business decision for those who find themselves in this situation. My wife and I are from Michigan and we both have stellar credit and we had made the decision to walk away from our house. Holding onto a house in which we had lost all equity and found ourselves about $30,000 in the hole on did not make any sense. We would be able to buy another house in about 3 years, or find a something with a purchase option or owner financing even sooner. The hit to our credit was temporary, but $30,000 was about 50% or our annual income, coming up with that would have set us back more than the 3 years of crappy credit. Two weeks after making the decision to walk away from the home a miracle happened. We found a buyer on a land contract for what we owed on the house. We are about 24 months in and they have paid on time each month without any troubles and we are making a small amount on the high interest they are paying too. The value was not going to come back anytime soon, and we were not going to put our future on hold because of a house.
I am not surprised.... really.
I have talked to many conteplating a strategic default.
Scumbags.
Tutas is right on!!
Thanks for sharing the report with us all. I'm in agreement with TLW that strategic default in these economic times amounts to sound financial planning. Morally I have an issue with it (especially so in the case when one draws on their equity line of credit before defaulting). We're probably in for alot more of it in the coming year.
BY the way Liz, I loved your video and the camera obviously loved you. Did you do it yourself or did you have it professionally done?
Liz, strategically defaulting means personal responsibilty and shame have eroded from some lives. Not all of course, but there is that trend. Should we be surprised? Probably not if there is no critical focus put on them in society. It still ruins credit though...
Liz- It really opened my eyes that high credit score owners are more likely to walk away. Very interesting. I hope Broker Bryant is not right about 2010, but I fear he may be.
Really liked your promo video too!
Interesting, and I agree. The times they are a changing...going tits up in a mortgage is so common anymore the stigma is gone. There will be more.
I think there will be less of a stigma attached to the foreclosure going forward... there are just too many. In fact, I think that the surviving banks might just start shortening their memory.
Liz,
That was very interesting. I would have thought the low scores would have motivated the walk-away.
Brian
I thing strategic defaulters are doing the right thing. It is simply a business decision between them and the bank
Wow...who would have thought! Thanks for the interesting post. I'm still for the 20% down payment plan...to make walking look less appealing. Of course, we'll see that passed the same year the govt. passes a flat income tax rate, right??
I wonder if the banks would try and work with some of these people if there would be all these strategic defaults.
My husband has been out of work over a year and we have maintained everything. We have perfect credit still but can't get the bank to work on a mod b/c we aren't behind. If he was employed and we could rent some place I would think of doing it. THe banks took our tax dollars and are now screwing those that need help.
What a fantastic post, Liz. Congratulations on the feature! I know of at least one person who just walked away from their mortgage and was very surprised about how easy it was for them.
I don't see how creditors are going to identify strategic defaulters. It's not intuitive. Eventually the expected default rate will just be built into everyone else's costs.
I was in a neighborhood in Vegas late last year. 80% of the houses seemed to have a for sale sign in the yard, and the Realtor I was with said 90% were foreclosures. People just walked away. Prices had gone down over $200000 in the area, and it was easier to walk away then make the mortgage payment. The Realtor I was with, he had allready paid off his house, so he stayed...
Liz, I showed a house last week that is a 'strategic short sale.' The people are not behind in their payments, but contacted and got permission from the bank to short sell their home. This is another facet of this new trend.
Now we know what a bubble is. The next one is the Federal Deficit going pop, pop. People will then say how did we get into this. No one is responsible now, just buy ans spend. Maybe people are taking a cue from out current leaders.
Liz #2 "I consider strategic defaults to be sound financial planning. But, don't tell anyone I said that. Many do not agree with me on that particular point :)"
Strategic defaults.......sound financial planning ???
With all due respect, no, it is not. Let me be the dissenting opinion.
It is welshing on a deal. It is not accepting and taking responsibility for your failed business decision. It is not living up to what you promised to do. It is so much more, but apparently, the nice way to say it is that it is a strategic default. Somehow, that doesn't sit right with an untold number of us. We all know about bankruptcy and how common it is, but it doesn't make it right for those who do it for the easy way out. I consider it weak and pathetic in those particular situations.
Sorry, but add me to the list who do not agree.
Heather #35 "What a fantastic post, Liz. Congratulations on the feature! I know of at least one person who just walked away from their mortgage and was very surprised about how easy it was for them." Surprised at how easy it was for them? You hit the nail on the head at the root of the problem. That is the big problem. Yuck.
Liz-
Great Video!
It's unfortunate that planning to walk away from your responsibility and promise to repay a debt is considered a strategic exit plan. How can we expect economic recovery when people have a plan to not follow through with their financial obligations?
Liz - we are seeing more and more of that in Arizona too... It's an intersting strategy. 3 to 4 yrs later, they can be back in the market...
Liz: This is a very interesting artlicle and the results are stunning.
I know someone who recently walked away from a house and mortgage. We may see more of these in the next few months.
Liz:
Interesting article. I think we are going to see more and more of this as wages decline and high paying jobs go overseas. Some places and neighborhoods are pretty scary with the number of vacant houses.
Liz,
I'm surprised to hear that the high credit score owners are more likely to default. But I guess that makes sense because they may be more business savvy.
I love the video. It looks so professional.
Liz,
This is so timely! A buddy of mine with excellent credit was just talking to me about this last weekend
Paul G. Guenther
Business Development Manager
Chicago Title Insurance Company
http://www.mytitleguypaul.com
mytitleguypaul@gmail.com
Liz, Not sure it's an indication of much moral fabric. As has been mentioned the more folks that BK or foreclose the less stigma there is attached to it.
It's the shame factor. . a lot of these people are to ashamed to ask for help and they simply walk away or wait until the last minute. . I'v been dealing with this issue for the last 2 years.
The stigma is no longer a stigma so I can understand the move. I have considered it but of course can't bring myself to act!
Liz, it's a sad thing that is happening to our economy and that fact that people are having to make these choices. It used to be a HUGE deal to have a foreclosure on your credit and people are taking it for granted
I am not surprised.... really.
I have talked to many conteplating a strategic default.
Scumbags.
Tutas is right on!!
Liz:
Living in Arizona where houses have dropped in value by 32% over just this past year, this after about a 40-50% drop over the previous two years this strategy makes logical financial sense. Knowing this, being a builder and RE Broker seeing this happening since 2006, we have come up with what we think is a cutting edge solution. What if people could sell their homes, even in this depressed market for at least what they owe on them. It sounds too good to be true, but at www.REChamp.com planning to launch in October, we pool a non refundable bidders fee from many bidders to pay off the original seller and then have a no minimum auction with seller financing so credit scores do not matter. http://www.youtube.com/watch?v=7QrDN2CtBws . LETS STOP THE CRAZINESS NOW!
Amazing to think who is most likely to default - those with the higher scores - although I am seeing that in our market here too.
Great info! I have a friend who is considering a strategic default on his million plus dollar home right now. He fits the profile exactly, kids are still in private school, paying cash for the Volvo's and Lexus, home equity line of credit, and ready to walk from the upside down house.
I never counsel a client to do so, but I think it's a sound business decision. Personally, I wouldn't be able to do it because of how I was raised.
However, it's becoming apparent that they who do right are those who are disadvantaged by a society which exalts the irresponsible and the deliberate schemers.
I bet this is just the first wave in some upcoming tsunamis of "well, if Wall Street, government, etc, can screw people, why not me, too?"
Michael
excellent post, thanks for the information, the propmo video at the bottom of your post is awesome!
I have been trying to find the data to support this for a while, thank you for posting this. It has been very obvious that the number of foreclosures wasn't just coming from people who couldn't afford the mortgage payment. There have been so many people who have purchased another home and let the other home go because the lack of equity. They want to downsize or upsize it doesn't matter, credit doesn't matter all that matters is it is a means to an end regardless of the consequences to anyone else.
thanks for the great post!
Colleen Lynema, CMLO, CALO
Certified Master Loan Officer
American Mortgage Centers, Inc.
Liz
Thanks for sharing this reports data.
I actually know of instances where this strategy has been
employed by high credit score borrowers. In some cases
they aren't walking away, but are using it to negotiate
a better deal from the lender(s).
Rob
Hi Liz, I am amazed at the findings. It would appear that this would loosen up the loans for the lower end clients who are struggling, but that will not be the case.
I have more I could say but won't! Seems that I am the odd man out here as to what your post made me think of!
Michael #57 said, "However, it's becoming apparent that they who do right are those who are disadvantaged by a society which exalts the irresponsible and the deliberate schemers."
I completely agree. The sad part is look how many replies go along with it like it's ok, agree with it, acting like it is some virtuous and shrewd business strategy. It is not. It is not "just business", it shows others what you're made out of.
It also opens your eyes up to those around you who you now begin to see in a different light. Sad but blatantly obvious.
Liz,
This great posts backs up something I thought I've been seeing. Don't know that it bodes well, but I am pleased to have you offer us real data!
Thanks to everyone for the lively discussion. For those of you that had questions on the video, it was directed and produced by Turn here Videos, here's the link.http://www.turnhere.com/
I'm with TLW on this one. A strategic default can be a best financial option for some and I have known those who have planned for it. They are well educated and do their research and set up a plan before defaulting. Is it "morally wrong"? Well, last time I checked, morals didn't factor into one's credit score. Thanks for posting the study.
Tina in Virginia
Liz- Thanks for bring this really very interesting article! I really can see the correlation between what I see and the article. Oh... great video. well done!
It sounds like before long this will be the norm. Times are a change that is for sure. Very interesting. Max out your equity line and hit the road. Buy a smaller house with the other equity line and you are set. Scary that people are spending time planning how to get out of not paying for what bought. Of course a couple of years bad credit is not so bad. Really makes you think. Thanks Liz.
I may be the only optimist in America but I disagree that home values can't come back just as fast as they dropped. The obvious point is there could be some time in between where prices aren't declining but not appreciating. My argument for this would be:
This is obviously a contrarian point of view and goes against the grain but either argument is speculation. The "experts" can't even get it right so I say do what everyone else isn't doing and pay your mortgage.
Liz - I am also a huge fan of Lake Havasu. I live in Phoenix and your video made me want to put my house on the market and move to Lake Havasu. Wonderful job....
David, come join us in paradsie, or at least come up and have lunch!
Agree of Disagree with the people doing the strategic default they are certainly no worse than the banks getting the bailouts. They have looked at the situation and are doing what is best for them; just as the banks are. Nobody is bailing me out.
I have not really seen this here yet. But, I will keep it in mind now to be on the lookout. I do know of one person who walked in Florida where they had their vacation home.
They fit the profile of what the study said.
In Michigan many of our home owners have negative equity...wonder what would happen if 50% walked away.
Thanks for the information! 83% of all US homeowners have negative equity! That's astounding! We all better be ready for the Huge # of ARMS that will Adjust and peak in 2012! We all need to constantly get educated on the current market trends, so we can better serve our clients and communities.
Sincerely,
Cindy Keil. Realtor, CDPE
Thanks for introducing me to this new term, strategic
I have a close friend who walked away from his house and two mortgages with good credit and without previously missing a payment...but in his case it wouldn't really be a "strategic default" in that he could see the writing on the wall and knew that hardship default was coming - he was underemployed due to the housing bust and running out of savings. He decided to get into a long-term rental before his credit was wrecked from the foreclosure (it's hard to rent a decent place with bad credit) and is taking advantage of his lower housing costs to pay off his remaining debts and keep his non-mortgage credit spotless. Then after 3 years or so of hunkering down and waiting for the economy to improve he hopes he can start over again. It helps that he has a newer car (with payments) and existing credit cards so he won't conceivably need to apply for any credit for a few years.
So maybe some of those seemingly strategic defaults are really just preemptive defaults?
Liz,
This is very good post. You bring out a important fact; many of the defaults are "Strategic." As those of use who are doing shortsales can attest; banks all but encourage their customers to be in default in order to get a response on a short sale request. I had a client who's job was in jeopardy so he listed his home in preparation to relocate. We had a good offer and ready to close. My client had great credit and paid his mortgage on time.
The bank drug their feet for 6 months. The client finally got frustrated and walked from the property. Once the bank knew the property was vacant they approved the short sale and they started "calling me".
I have made the decision I will not take any short sale listings unless the property owner is in default.
Ken Southern California
Those numbers are eye-opening indeed. I do find it some what ironic that this mess is still being blamed on the poor and uneducated, when report after report shows that record increases in default rates of mid-upper class, educated members of society are really the culprit.
Without getting to a moral or ethical discussion, I think that it will be much more common as people continually owe much more than their home is worth.
I have heard that the lenders are going to sell the defaulted loans to collection agencies so they can recoup some of the money. These collection agencies will then go after the people who defaulted. What is your take on this information? It does seem to make sense.
Steve, in these crazy times anything is possible, sounds like a giant waste of time and the collection agencies money.
This is surprising but on the other hand makes sense. Is this totally about value or is it about saving money?
Liz,
It is like Middle Class America is going to come out of the closet. It is strictly business.. an investment in Real Estate which didn't work out.. That is how people are justifying the "moral conflict" Think about other business investments... if you had a retail store and sales stopped you would have to let your employees go, liquidate your inventory and close the doors.. Real Estate as an investment is a business transaction. Why should someone paying $1,000 a month negative keep throwing $12,000 a year away for another 5 years maybe 60k to HOPE the house is worth what they owe on it now... Owners just have to know like a banker once told me.. "know when to say when" stop the bleeding and move on. I love the term Strategic Default! Yes, that is exactly what it is and when you go to a social gatherings these days people are asking why you are still in that bad investment.. get out and move on. OH MY, now the next level of foreclosures is on it's way which no one counted on! Yes, they are coming. Strap in and buckle up. It's waddling and quacking...
This information does not surprise me in the least. Our average list price in the area that my firm services is over $1.8 million. "Strategically" it may make sense to walk away from the mortgage than it is to go through the pain of a short sale and ultimately foreclosure - where your name is published for all to see in the newspaper.
IO, Option Arms, A-loans were all very popular in prior days. It's not the ARMS that are hurting people right now. An interest re-set is not likely to be that significant given the rate of the underlying index to which the loan is tied. However, negative amortization, inability to pay down principal and/or refinance these loans is what is causing people to look at the situation and separate themselves from the homestead.
I think when I talk about strategic defaults on other people's blogs because they feel sorry for someone or a group of people and I don't, they are shocked.
Strategic defaulting is chic here and unless you live in foreclosure hell paradise, you won't get it. People are cavalier about it and talk about it freely. You will have someone across the table saying "oh mah gawd, me too!" (using best valley girl voice) when you are having dinner with a group of people.
It ain't gonna end until we see less negative equity in our market so basically that isn't any time soon in the foreseeable future.
I look at it this way: I paid $235K in 2002, it was worth $600K in 2005, I only cashed out for a pool so I didn't take an extraordinary amount out of my house. My house is only worth $180K now (with pool) - so I am about $100K in the hole. ALL of it is on "paper". It was worth a lot on paper in 2005 and I didn't sell or cash out an extreme amount and it is worth nothing on paper now and I am not letting it go. I will tell you what, I can't rent my house for less than my house payment so I am staying put!
"Investors" who bought with 100% loans and very little out of pocket with no emotional attachment: different story, easy to let it go. Also people with high net worth and care about paper wealth, they can afford to let it go too.
This just goes to show you that we are not out of this mess yet I do not care what the govt. says or NAR
I cannot understand how anyone can walk away if they have the means to pay or modify their mortgage. Since Obama implemented the Make my home affordable program, I feel there is no excuse for anyone to walk away. Why in the world would they, unless job loss or disability. even then, mortgage companies seem willing to help.
If one ruins their credit by strategically defaulting, when will they ever get a chance to own a house again?
It's strictly a "business" decision, stop the loss and move on. As for the making home affordable program or loan mods, that option does not fit. Credit can be repaired over time, throwing thousands of dollars away yearly, with no guarantee that values will return makes the "strategic default" the wisest move of the moment, not a moral decision, strictly dollars and "sense".
This is a very sad time Liz. People are walking away from THEIR poor decisions and the Taxpayers will flip the bill.
I'm getting calls from would-be tenants who want to secure a new RENTAL HOME before they leave their CURRENT home that they are upside-down on....they have owned their home for many years and re-fied to continue an EXTRAVAGANT lifestyle - multiple cars, toys, flat screen TV. Some want a LARGER home to bring multiple generations together * My suggestion is to do that and KEEP their CURRENT homes, their children close to friends, their dignity!!!
Just shows that those with money and are careful at managing it are making calculated decisions on how to best manage it for their own good, morals and character be damned.
Well, I don't have all of the answers, and the world is full of grey not black and white, But I do know some more agents that I would never refer anyone to... and some I would...
To those of you who don't think it is fraud to strategically plan on defaulting on a loan, Could I borrow some money? I'll give you a better rate than the bank...
What ever happened to shame?
Cara Riley above hit the nail on the head: If you were in a retail business that was losing $1,000 a month, people would think you were stupid to stay in it. Why stay in a real estate deal doing the same thing? My client bought a home in 2007...paying $575,000 with 20% down (no 100% financing). They pulled appx. $250,000 from savings and redid the house, everything from electrical & plumming upgrades to flooring, kitchen, etc. So they have over $800,000 invested in the home. They have to relocate for work. The home is appraised now for $375,000 (S Florida). What would you do? It costs about $80,000 a year to maintain (debt service, taxes, insurance, landscapers, roofers, utilities, etc). WHAT WOULD YOU DO?
Hi Liz~ I guess one just never knows what they would do if they were in the same situation. I know it is happening, but I have never heard it called a strategic default.
Great research! I reblogged it. Thank you so much! Joy
Hi Liz ! I saw this reblogged by Roland, and what a treat ! A GREAT video post !!
Nicely done :o)
Sheldon
Well done and thanks for that great information. I think that Experian was shocked at the results always blaming the lower end of the credit scale.
Liz - You bring up some very interesting statistics. I had wondered about some of these same points in the last months. I've overheard conversations among those that seem to have lived large in their credit past, but are also a little short on ethics. They could continue making their mortgage payments, but wonder why they should take a hit of $100,000 loss on their home values and equity. Especially when they are upside down by that much. They still have their jobs, but would rather abruptly stop their mortgage payments, putting the money away in a war chest, and then rent awhile when they are inevitably closed upon. I feel these folks are almost the worst kind of strategic defaulters.
Very interesting Liz. I kind of suspected that and it's nice to have some confirmation.