Experian announces strategic defaults remain high, with 17 percent in the second quarter of last year; numbers are not likely to decline unless housing prices increase
New report from Experian and Oliver Wyman provides in-depth analysis on the current landscape of strategic defaults and a clearer profile of defaulters
Costa Mesa, Calif., June 23, 2011 — Experian®, the leading global information services company, today announced the availability of a Market Insight Snapshot report that analyzes strategic defaulters and provides recent findings on the profile of these individuals.
The study found that in 2008, strategic defaults peaked in Q4, accounting for 20 percent of all mortgage defaults 60 days past due or greater and have fallen below that percentage every quarter through Q2 of 2010. The last quarter in 2009 indicated a 16 percent strategic default rate and 17 percent in Q2 of 2010. Although percentages slightly dropped since 2008, they still remain high creating a continual issue for lenders.
“Experian, along with Oliver Wyman, pioneered and published the first research on strategic defaulters in 2009 and has continued the in-depth analysis to further understand and identify key behaviors and trends,” said Charles Chung, Experian’s president of Decision Analytics. “It’s important for lenders to understand findings such as why about 90 percent of strategic defaulters are continuing to stay current on their other obligations — even a year after they’ve gone delinquent on their mortgage. Knowing more about these behaviors helps lenders personalize strategies for consumers who have defaulted on their loans.”
The report also shows that consumers with higher origination balances are more likely to strategically default. Of loan default customers with origination balances of less than $50,000, only 6 percent were strategic defaulters while 38 percent were distressed defaulters. For those with loan origination balances of more than $1 million, one-third had strategically defaulted while only 20 percent had defaulted under distress.
To receive a copy of the Experian Market Insight Snapshot, please contact Kristine Snyder, Experian Public Relations, at 1 714 830 5192 or kristine.snyder@experian.com.
Contact:
Kristine Snyder
Experian Public Relations
1 714 830 5192
kristine.snyder@experian.com
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was $4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
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