Strategic defaults show slight increase during first quarter

National strategic defaults were up during the first quarter of 2011.According to a report from credit bureau Experian, the number of strategic defaults increased slightly during the first quarter of 2011 after experiencing significant reduction recently.Overall, 17 percent of all home loan defaults during the first quarter of 2011 were strategic defaults, up one percentage point from the previous quarter. Experts had hoped the economy was returning to health, as the percentage during the last quarter of 2010 was well below the peak reached in the fourth quarter of 2008 at 20 percent.”It's important for lenders to understand findings such as why about 90 percent of strategic defaulters are continuing to stay current on their other obligations – even a year after they've gone delinquent on their mortgage,” said Charles Chung, Experian's president of decision analytics. “Knowing more about these behaviors helps lenders personalize strategies for consumers who have defaulted on their loans.”Experian discovered that homeowners with fewer than $50,000 remaining on their mortgage were much less likely to walk away from their home loans, while those owing more than $1 million were five times as likely to do so.Areas with improving job sectors are most likely to avoid strategic defaults, as more homeowners are able to make their monthly payment. Thus, the Houston real estate market might avoid spikes in these defaults, for instance.Courtesy of 2M Realty News?

About 2M Realty

All content from this author comes from 2M Realty News Feed

Speak Your Mind



Get every new post delivered to your Inbox

Join other followers: