A new study from TransUnion reveals that buyers who default on their mortgage are not as much of a credit risk as their scores may indicate.
The study looked at those who had defaulted on their mortgage in the recent recession and found that these consumers were less likely to default today than those who had stopped paying for other credit obligations, such as credit card debt or car loans. In fact, a chunk of these people were "strategic defaulters," people who opted to default on purpose because of the low value of their homes, even though they could afford to pay. These consumers in particular are savvy about credit and are generally the type of customers that lenders seek out.
Steve Chaouki, TransUnion vice president, says that these consumers "are less risky than they appear," adding that "lenders will want to lend to these people in the future."
If heeded by lenders, this new study could be a boon to those who have had their credit score damaged by a mortgage default, assuming that the rest of their credit history is acceptable. Lenders have been more willing to offer car loans to buyers with subprime scores as of late anyways, so those seeking auto financing shouldn't hesitate to apply.