Foreclosures actually help the economy

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Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Foreclosures actually help the economy

There are roughly 75 million mortgages in America and 140 million employed persons. That means 1 in 2 workers are paying a mortgage. Mortgage debt is somewhere around 11-12 trillion. I cant exactly calculate how much $$ is going towards home payments but i bet with insurance, property taxes and other expenses it is over 1 trillion. So, with all of this money going towards mortgage payments, there is less cash to go around. Also, many of these mortgagees are overpaying for these investment/first homes. Thus, with more people walking away from these malinvestments (my family bought 2 homes, a condo, and a 10 acre property in the desert during the boom) there will be much more money to spent/invested in other areas of the economy.

The foreclosure experience will be painful for many, but as it becomes more and more common people will feel relieved to walk away from the paycheck consuming monster.

radishcake's picture
radishcake
Status: Bronze Member (Offline)
Joined: Jun 11 2009
Posts: 38
Re: Foreclosures actually help the economy
bearmarkettrader wrote:

 

The foreclosure experience will be painful for many, but as it becomes more and more common people will feel relieved to walk away from the paycheck consuming monster.

For many, the paycheck consuming monster is property tax, not a mortgage payment.

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