Consumer credit analytics firm FICO (FICO: 25.96 +2.12%) said mortgage servicers need to take a more proactive approach to borrowers they feel are likely to strategically default on their mortgage. The prevention of future litigation costs, FICO said, is alone worth the effort.
"Within the current population, the goal is to spot likely strategic defaulters before a delinquency develops, enabling servicers to intervene early," FICO said Wednesday in a blog post.
Mortgage servicers should give potential strategic defaulters advice on other ways to relieve their mortgage burden such as a short sale or loan modification, the company said.
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