Many people make a strategic decision to default on their home loan.
Why? Because it is in their self-interest. Big businesses default on various loans all the time when it is in their self-interest.
The lower the down payment on a home, the more likely people are to default on their home, particularly if it goes underwater.
So-called strategic defaulters who voluntarily stop making their mortgage payments are very savvy financially and sometimes line up their next home and loan before they walk, according to a new study.
“They are high income, they are high wealth, they own multiple homes, they have higher … (credit) scores and they are very financially savvy,” said Tracy Bremmer, director of product marketing and management at Experian, the credit reporting agency that issued the study. Reuters obtained a copy in advance of its distribution.