Research done by credit report company TransUnion has confirmed what Fort Lauderdale foreclosure attorneys already knew: people who default on their mortgages are not necessarily serious credit risks. TransUnion identified a class of people that defaulted on their mortgages but not on any other debts, and found that they are less likely to default on future loans than people who default on their mortgage and default on another debt at the same time.

TransUnion found that mortgage-only defaulters had credit scores that recovered sooner than borrowers who defaulted on more than one loan.

The reason TransUnion has taken such a keen interest in mortgage-only defaulters is that there are going to be so many more of them in the future. More than four million homes have been foreclosed on in the last five years alone. The financial situations of those homeowners have varied widely. Some of the victims of foreclosure were strategic defaulters, who walked away from homes where the value of the property was so far below the mortgage balance.

Perhaps not surprisingly, researchers found that strategic defaulters showed a lot of intelligence about credit. They had better credit scores than other mortgage defaulters.

Research compared mortgage-only defaulters to multiple defaulters at a distance of 120 days after mortgage defaults. Mortgage-only defaulters were 60 days delinquent on new car loans 6% of the time, compared to 13% for multiple defaulters. For credit card 60 day delinquency, mortgage only defaulters had 11% credit card delinquency as compared to 27% for multiple defaulters.

Source: USA Today "Study: Mortgage-only defaulters may be safe credit risks" 5/24/2011