Offers to workout home loans that are at last two months delinquent appear more likely to prompt borrowers to strategically default, according to a study by the National Bureau of Economic Research. A paper on Countrywide Financial’s mortgage-modification program stated, “The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios.”
