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From the recent Lender Processing Services report comes the chart shown below depicting the latest foreclosure trend - non-foreclosures. That is, where borrowers stop making mortgage payments but stay in the house.
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Does anyone know of any estimate of the impact of this extra cash on such things as consumer spending within the GDP data? Here's my back-of-the-envelope calculation for Q4:

  • 3 months x $1,000 a month x 711,214 households x 75 percent = $1.6 billion

Assuming these "homeowners" bought things with 75 percent of what they didn't pay in mortgage payments, this would account for about 2 percent of the increase in personal consumption during the fourth quarter - not really significant, but it sure didn't hurt.

Source: The New Foreclosure Trend