Your FICO Score

A 2009 study by the credit reporting company Experian and consultant Oliver Wyman determined that approximately one fifth of troubled mortgages in the United States involved borrowers doing a strategic forclosure.

Forclosure Map of United States counties

After the borrower quits making mortgage payments, s/he can live without making mortgage payments until the lender forecloses on the property. This may take months or even years. During this period, the borrower has more money and can pay off other debts, which will raise their FICO credit score.

Foreclosure of the borrower’s house will cause a negative entry on their credit rating and reduce their FICO store. This is likely to make obtaining a future mortgage more difficult and more expensive. US government agencies will deny new mortgages until 3 (FHA) to 5 years (FNMA) have passed since the strategic forclosure.