BL: `Strategic' Home-Mortgage Defaults in U.S. Reach 12%, Morgan Stanley Says
By Jody Shenn
April 29 (Bloomberg) -- Decisions by homeowners to walk away from mortgages they can afford are accounting for more defaults, according to Morgan Stanley.
About 12 percent of all mortgage defaults in February were “strategic,” up from about 4 percent in the middle of 2007, New York-based Morgan Stanley analysts led by Vishwanath Tirupattur wrote in a report today.
Borrowers with higher credit scores and larger loans are more likely to stop paying their mortgages even while staying current on other consumer debt of at least $10,000, the analysts wrote, based on analysis of data from Transunion LLC.
Strategic defaults also increase based on how much more borrowers owe in housing debt than their homes are worth, they said.
To contact the reporters on this story: Jody Shenn in New York at jshenn@bloomberg.net
Last Updated: April 29, 2010 10:13 EDT
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