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WASHINGTON – With tougher mortgage underwriting rules a virtual certainty under Congress’ new financial reform legislation, lenders have begun confronting still another vexing issue: Can homebuyers who have high credit scores really be trusted not to pull the plug – strategically default – when the economy hits a rough patch and home values tank?
New research based on data from 25 million active consumer credit files suggests the answer just might be no. Though people with the highest-ranking credit scores are less likely to default on their mortgage compared with people with lower scores, when they do default they are much more likely to do it strategically – simply stop paying with little or no warning in advance.
In a study released June 28, researchers from credit bureau giant Experian and the Oliver Wyman consulting firm found that borrowers with “super prime” credit scores accounted for 30 percent of all mortgages outstanding in mid-2009 but produced just 5 percent of all serious mortgage delinquencies.
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