The Monthly Question

Imagine you are a struggling homeowner–barely making ends meet. (An all-too-common scenario these days.)

You have three bills to pay this month:

Credit cards
Car loan

You can only afford to pay one of them. Which one do you choose?

(Insert Jeopardy theme music here….)

According to a recent article in the Minneapolis StarTribune, 39% would choose to pay their car loan–even if they were delinquent on the mortgage. The article cites the need for transportation to look for or keep a job as the reasoning. Also credit cards put food on the table and gas in the tank when income is down or you’re out of work. Thankfully, homeowners have options to avoid the tough question we’ve posed above. Local nonprofits and government agencies (found via MortgageKeeper) offer help with job searches, food, prescription drug costs, and utilities. So homeowners can find the breathing room they need to perhaps stay current on more than just their car. Credit counseling can also help reduce debt payments and build a sustainable budget. We are proud to say that we help people find the resources they need to stay afloat. And we do it 2,700 times a day.

Support for Housing Counselors!

We see a lot of money tossed around to solve the housing crisis–sometimes to no avail. But HUD’s new approach made us stand up and cheer…$42M to housing counselors. And NFMC followed suit Monday.

Great news for distressed homeowners trying to find unbiased solutions!

In all fairness, we should state here that MortgageKeeper is used by some of this country’s largest counseling agencies to help their struggling clients. But we’ve partnered with them for years because we know counseling works…and works well. HUD has found that 9 of 10 troubled homeowners who receive housing counseling are still at the same address 18 months later.

They know what we know: housing counseling is a great investment.

Mapping Consumer Distress

We know that folks are struggling. When our database referrals jump from an average of 2,500 a day to 2,700 a day in just a few months, overall conditions aren’t improving. It can be hard to understand the magnitude of consumer debt and net worth issues.

Sometimes a picture can illustrate what words never can.

Our clients at CredAbility have a map that shows what they call their Consumer Distress Index. It measures the financial condition of the average U.S. household.

Let us summarize it for you. Unless you live in North Dakota, your state distress level is a best weak. Many states are at the “distressed” level. And the poor folks in Nevada? Emergency crisis level.

We see glimmers of hope around. From a realtor’s “SOLD” sign in our neighbor’s yard, to lower interest rates for mortgages, to the “winter that wasn’t” that’s sure to lower utility costs–times are a-changing. But with more people looking for help than ever before, we cross our fingers that things are changing for the better.