Believe those who are seeking the truth. Doubt those who find it. Andre Gide

Tuesday, April 13, 2010

Are Mortgage Defaults Driving Consumer Demand?

Came across this "funny" story: Mortgage Defaults May be Driving Consumer Spending.
You've got to like this one:

First he describes a case study of someone who applied for the government's Home Affordable Modification Program. The person had an $1,880.00 monthly mortgage payment on which they'd defaulted, but said person's monthly bank statement showed payments to a tanning salon, nail spa, liquor stores, DirecTV bill with premium charges, and $1,700.00 in retail purchases from The Gap, Old Navy, Home Depot, Sears, etc.

The article does not say whether this person was ultimately given government assistance. What would you guess?

1 comment:

  1. Having just read the whole article, I'm guessing "no." Are you guessing yes?

    Also, found the opening quote from the article a bit funny:

    "The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years."

    See anything redundant redundant?

    ReplyDelete