Walk-Aways Leading to Big Changes for All Borrowers' Credit Scores
"Overall, credit industry experts agree, consumer creditworthiness has deteriorated in the United States since 2006, especially among what used to be considered the credit elite, people with the highest scores."
"Not only are borrowers who previously were rated outstanding credit risks far more likely to default today, she said, but many homeowners are defying long-standing credit industry assumptions by going delinquent on their first mortgage payments while simultaneously continuing to pay their credit card balances and second mortgages on time. Strategic defaults - walkaways - by high-score borrowers also have been an unexpected and shocking development."
"Leading Democrats, such as Senate Majority Leader Harry M. Reid (D-Nev.) whose state was hit hard by the real estate downturn, have called on lenders to halt foreclosures. But the Obama administration says a nationwide delay could devastate the fragile real estate market in places like Florida."
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SOURCE: Foreclosure data from CoreLogic | Cristina Rivero and Mary Kate Cannistra/The Washington Post - Oct. 19, 2010