FICO, the Minneapolis-based credit-scoring and analytics company, is attempting to combat strategic defaulting by mortgage lenders, according to MinnPost. Strategic defaulting is the phenomenon whereby borrowers who have the capacity to make their mortgage payments choose instead to default, often because the property value is less than the loan agreement's outstanding principal. "Mortgage payment patterns have shifted, and some borrowers are intentionally defaulting because they believe it is in their best financial interest, and because they believe the consequences will be minimal," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. In an attempt to identify borrowers with high credit risk
, FICO Labs created a custom analytic modeling tool that can identify lenders who are 100 times more likely to default strategically than others. MinnPost adds that, as a group, strategic defaulters tend to be more savvy managers of their credit than the general population, with higher FICO Scores, lower revolving balances, fewer instances of exceeding limits on their credit cards and lower retail credit card usage. This indicates that strategic defaulters display a different type of credit behavior than distressed consumers who miss payments, the news source adds.