Strategic defaults

Those are folks who abruptly and intentionally walk away from a mortgage, even at the risk of lousing up their credit scores. New research from Experian and Oliver Wyman finds there are many more of these deadbeats than the experts had believed: 588,000 nationwide during 2008, more than double the total in 2007. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. From Ken Harney's column in the LAT:

Homeowners with large mortgage balances generally are more likely to pull the plug than those with lower balances. Similarly, people with credit ratings in the two highest categories measured by VantageScore -- a joint scoring venture created by Experian and the two other national credit bureaus, Equifax and TransUnion -- are far more likely to default strategically than people in lower score categories.

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Piyush Tantia, an Oliver Wyman partner and a principal researcher on the study, said strategic defaulters "are clearly sophisticated," based on the patterns of selective payments observable in their credit files. For example, they tend not to default on home equity lines of credit until after they bail out on their main mortgages, sometimes to draw down more cash on the equity line.

So there's obviously a method to the walk-off madness, though short of an identity transplant, I'm at a loss to figure out what it might be.