A new study shows more consumers are sinking into the deadbeat category of sub-prime and deep sub-prime credit scores. Meanwhile, the same study reveals that banks are being plagued by “strategic defaulters,” or those borrowers who default on their mortgages only because the value of their home has declined well below their mortgage balance. According to the new ExperianâOliver Wyman “Market Intelligence Reports,” sub-prime and deep sub-prime outstanding balances have grown by more than 33% in the past three years. Also, during the last 12 months, bankcard credit lines have declined by 17% to $3.1 trillion. In studying the distressed borrower population, Experian and Oliver Wyman uncovered a segment of borrowers it calls “cash-flow managers,” that closely mimics “strategic defaulters.” Unlike “strategic defaulters,” these borrowers continue to make occasional payments on their mortgage, indicating their intention to get out of delinquency. While 60% of “strategic defaulters” are charged-off within six months after serious delinquency, one-third of cash-flow managers cure on their mortgage within six months after serious delinquency and another third remain less than 90 days past due.