Mortgage Defaults May Be Driving Consumer Spending

[creechrr]

I concur with above statements and know a few people that are living that very reality. They haven’t made a mortgage payment in months, some by choice.

As time passes without any repurcussions they grow increasing comfortable with the situation.

– New Car…Yup
– Travel…Yup
– shopping…Yup

Not much saving if at all.

The one odd commonality of the group in question, is the belief that the general health of the economy is improving and that local housing prices will be approaching the heights momentarily.

A complete disregard for reality. When presented with facts they’ll even tend to agree with all points however there is always a, “yeah but” response usually along the lines of California being special or some other delusion.

I don’t know what the term is but, is goes beyond denial. It’s some sort of mania. I’m sure there will be term coined to describe it in the history books.

[briansd1]

[quote=jpinpb]I’ve been saying that people not paying their mortgage have spendable income. I see it as indirect collateral damage. Whether intentional or not, people’s biggest expense are housing and transportation. If one doesn’t pay their mortgage, that’s a heck of a lot of new clothes and dinners out. Maybe even a new car. Travel is another one.

People generally have not been savers. Certainly interest rates aren’t encouraging it. People in this country consume and spending is what I see most people doing w/their new found income. I heard something like 75% of our economy is from consumer spending.

Not foreclosing on people has helped our economy, at least temporarily. In the end, we will eventually have to reckon w/this.

I guess it’s just another, innovative way of using your home as your ATM.

Says it all.[/quote]

As I recall you were the first to make that observation.

The mortgage defaulters are helping the economy by immediately adding to GDP. 😉

[briansd1]

[quote=jpinpb]I’ve been saying that people not paying their mortgage have spendable income. I see it as indirect collateral damage. Whether intentional or not, people’s biggest expense are housing and transportation. If one doesn’t pay their mortgage, that’s a heck of a lot of new clothes and dinners out. Maybe even a new car. Travel is another one.

People generally have not been savers. Certainly interest rates aren’t encouraging it. People in this country consume and spending is what I see most people doing w/their new found income. I heard something like 75% of our economy is from consumer spending.

Not foreclosing on people has helped our economy, at least temporarily. In the end, we will eventually have to reckon w/this.

I guess it’s just another, innovative way of using your home as your ATM.

Says it all.[/quote]

As I recall you were the first to make that observation.

The mortgage defaulters are helping the economy by immediately adding to GDP. 😉

[briansd1]

[quote=jpinpb]I’ve been saying that people not paying their mortgage have spendable income. I see it as indirect collateral damage. Whether intentional or not, people’s biggest expense are housing and transportation. If one doesn’t pay their mortgage, that’s a heck of a lot of new clothes and dinners out. Maybe even a new car. Travel is another one.

People generally have not been savers. Certainly interest rates aren’t encouraging it. People in this country consume and spending is what I see most people doing w/their new found income. I heard something like 75% of our economy is from consumer spending.

Not foreclosing on people has helped our economy, at least temporarily. In the end, we will eventually have to reckon w/this.

I guess it’s just another, innovative way of using your home as your ATM.

Says it all.[/quote]

As I recall you were the first to make that observation.

The mortgage defaulters are helping the economy by immediately adding to GDP. 😉

[briansd1]

[quote=jpinpb]I’ve been saying that people not paying their mortgage have spendable income. I see it as indirect collateral damage. Whether intentional or not, people’s biggest expense are housing and transportation. If one doesn’t pay their mortgage, that’s a heck of a lot of new clothes and dinners out. Maybe even a new car. Travel is another one.

People generally have not been savers. Certainly interest rates aren’t encouraging it. People in this country consume and spending is what I see most people doing w/their new found income. I heard something like 75% of our economy is from consumer spending.

Not foreclosing on people has helped our economy, at least temporarily. In the end, we will eventually have to reckon w/this.

I guess it’s just another, innovative way of using your home as your ATM.

Says it all.[/quote]

As I recall you were the first to make that observation.

The mortgage defaulters are helping the economy by immediately adding to GDP. 😉

[briansd1]

[quote=jpinpb]I’ve been saying that people not paying their mortgage have spendable income. I see it as indirect collateral damage. Whether intentional or not, people’s biggest expense are housing and transportation. If one doesn’t pay their mortgage, that’s a heck of a lot of new clothes and dinners out. Maybe even a new car. Travel is another one.

People generally have not been savers. Certainly interest rates aren’t encouraging it. People in this country consume and spending is what I see most people doing w/their new found income. I heard something like 75% of our economy is from consumer spending.

Not foreclosing on people has helped our economy, at least temporarily. In the end, we will eventually have to reckon w/this.

I guess it’s just another, innovative way of using your home as your ATM.

Says it all.[/quote]

As I recall you were the first to make that observation.

The mortgage defaulters are helping the economy by immediately adding to GDP. 😉

[jpinpb]

I’m just very curious what’s next. We’ve had the following:

1. Low rates – check (must go up evenutally)
2. Stimulus – check
3. Tax credit – check (set to expire)
4. Living for free – check (eventual foreclosure)
5. Unemployment bene extended – check (ending ?).

We won’t go into what all this has done for your dollar or our next generation taxpayers. But TPTB can actually call this victory and a recovery (albeit temporary IMO) But question would be how long can they continue w/1 through 5 and what else can we expect.

Edit: I guess the next thing would be inflation. But I see that as a nail in the coffin, especially for unemployed and furloughed/paycut people.

[jpinpb]

I’m just very curious what’s next. We’ve had the following:

1. Low rates – check (must go up evenutally)
2. Stimulus – check
3. Tax credit – check (set to expire)
4. Living for free – check (eventual foreclosure)
5. Unemployment bene extended – check (ending ?).

We won’t go into what all this has done for your dollar or our next generation taxpayers. But TPTB can actually call this victory and a recovery (albeit temporary IMO) But question would be how long can they continue w/1 through 5 and what else can we expect.

Edit: I guess the next thing would be inflation. But I see that as a nail in the coffin, especially for unemployed and furloughed/paycut people.

[jpinpb]

I’m just very curious what’s next. We’ve had the following:

1. Low rates – check (must go up evenutally)
2. Stimulus – check
3. Tax credit – check (set to expire)
4. Living for free – check (eventual foreclosure)
5. Unemployment bene extended – check (ending ?).

We won’t go into what all this has done for your dollar or our next generation taxpayers. But TPTB can actually call this victory and a recovery (albeit temporary IMO) But question would be how long can they continue w/1 through 5 and what else can we expect.

Edit: I guess the next thing would be inflation. But I see that as a nail in the coffin, especially for unemployed and furloughed/paycut people.

[jpinpb]

I’m just very curious what’s next. We’ve had the following:

1. Low rates – check (must go up evenutally)
2. Stimulus – check
3. Tax credit – check (set to expire)
4. Living for free – check (eventual foreclosure)
5. Unemployment bene extended – check (ending ?).

We won’t go into what all this has done for your dollar or our next generation taxpayers. But TPTB can actually call this victory and a recovery (albeit temporary IMO) But question would be how long can they continue w/1 through 5 and what else can we expect.

Edit: I guess the next thing would be inflation. But I see that as a nail in the coffin, especially for unemployed and furloughed/paycut people.

[jpinpb]

I’m just very curious what’s next. We’ve had the following:

1. Low rates – check (must go up evenutally)
2. Stimulus – check
3. Tax credit – check (set to expire)
4. Living for free – check (eventual foreclosure)
5. Unemployment bene extended – check (ending ?).

We won’t go into what all this has done for your dollar or our next generation taxpayers. But TPTB can actually call this victory and a recovery (albeit temporary IMO) But question would be how long can they continue w/1 through 5 and what else can we expect.

Edit: I guess the next thing would be inflation. But I see that as a nail in the coffin, especially for unemployed and furloughed/paycut people.

[briansd1]

What’s next?

inflation, price controls.

I actually support price controls. Real estate parcels that benefit from mortgage modification or some other kinds of relief should be forever deed restricted as “affordable” and not be allowed to rise above a certain percent over time.

[briansd1]

What’s next?

inflation, price controls.

I actually support price controls. Real estate parcels that benefit from mortgage modification or some other kinds of relief should be forever deed restricted as “affordable” and not be allowed to rise above a certain percent over time.

[briansd1]

What’s next?

inflation, price controls.

I actually support price controls. Real estate parcels that benefit from mortgage modification or some other kinds of relief should be forever deed restricted as “affordable” and not be allowed to rise above a certain percent over time.

[briansd1]

What’s next?

inflation, price controls.

I actually support price controls. Real estate parcels that benefit from mortgage modification or some other kinds of relief should be forever deed restricted as “affordable” and not be allowed to rise above a certain percent over time.

[Author]

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