Stung by homeowners who give up paying, banks ask: Who’ll walk away?

Homeowners who strategically default on their mortgages hope to fly under the radar, living payment-free while their foreclosure wends its way through the courts – a years-long process in some cases.

But the nation’s leading credit-scoring company says it has developed a better way to identify borrowers who can afford to pay their mortgage but choose foreclosure instead.

FICO’s new analytical tool, which combines such factors as spending habits, changes in a person’s debt and housing depreciation, is heralded as a way to ferret out borrowers making a business decision to walk away vs. homeowners who truly can no longer afford their mortgage. FICO claims to be able to make this distinction before a borrower is even in default.

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