Tuesday, April 20, 2010

Not Paying The Mortgage As Well As Still Collecting Rents Is Good For Consumer Spending

I hadn't thought of this:

The same can be said of the housing market: without gaming the system, the housing market would go into a free-fall. This holds true not just for the mortgage lenders and Wall Street but also for the American public, many of whom are happily complicit in the fraud perpetrated by the mortgage packagers and lenders, as described by southern Nevada correspondent B.K.:

During the boom years, many (in fact, most) people purchased more than one home. In order to get around the "primary resident" issue (a.k.a. "wink and a nod" clause), contracts were drawn-up under the name of a sister, father, family dog, whatever.

Now - these "investors" are not simply living in one of their primary residences rent-free - they are also collecting rent on the other homes that they stopped making their mortgage payments on last week, month, or last year! This is the reality here in Las Vegas; it is the norm.

When you looker deeper into the economic ramifications of this ongoing housing mess as it relates to consumer spending, you begin to see ... the Deadbeats are so happy to get "free" money on their many homes, they offer attractive deals to tenants. A property that might normally rent for - say - $1,500/mo, is being offered for $1,000/mo. Now that puts extra money in the tenants' pockets to spend on the economy as well.

1 comment:

miriam said...

How in the world does that work? It doesn't make sense to me. I must be missing something.