Consumer Metrics Institute: Mortgage Defaults Likely Increase Consumer Spending 2-4%

February 7th, 2011
in econ_news

foreclosure pic Econintersect:  The CMI (Consumer Metrics Institute) has estimated that some of the mortgage payments not made when a mortgagor is defaulting end up as consumer spending.  The current levels of default and foreclosure activity has led CMI to estimate that $90 billion a year is no longer being paid to lenders by defaulting home owners.

Follow up:

Of this $90 billion, between 25% and 50% is being spent, CMI estimates.  This would account for 2-4% of current consumer spending on discretionary consumer durable goods. 

Source:  GEI Analysis

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