The creator of FICO scores, Fair Issac, has developed a program that will predict which home owners may strategically default. The program takes into account many different aspects of a borrowers finances including but not limited to:
- Length of home ownership
- Credit Card Debt
- Timeliness of bill payments
- Newly opened credit card accounts
According to Andrew Jennings, CAO at FICO,
“Our new research shows it is possible for servicers to find those at greatest risk of strategic default, both to prevent losses and to prevent borrowers from making a decision that will damage their credit future”.*
Now this sounds like it may be a promising program geared at looking for underwater home owners that need help but I think there are deeper motives at hand. Jennings says the program is being used to “both prevent losses and to prevent borrowers from making a decision that will damage their credit future”. What does that mean for strategic defaulters? With Nevada being a deficiency judgment state I’d put more emphasis on the “prevent losses”. Lien holders and servicers are going to use this technology to sort through their loan portfolios looking for people to pursue after foreclosure. Those that walk away when they were fully capable of paying their mortgage, even if it is a poor financial decision, are now on the radar and the banks will be watching.
Have you thought about pursuing a short sale? Let me help you through it. Contact me via phone or email to get started.
*Housingwire.com “New FICO technology predicts strategic default” Ricciardi, Christine 4/20/2011