Insiders See Increased Borrower, Business Need For Counseling

The complex issue of how Wall Street relates to Main Street brought into the limelight by the Occupy Wall Street movement was in fact delivered by the ongoing economic crisis and the seemingly never-ending foreclosure disaster.

We live in a reality where everyone, whether they see themselves as part of 1% or 99% are interested in improving their finances and money management skills. And as in recent years past, it is a major theme for 2012.

Servicers should be happy to hear that according to a yearend poll conducted by the National Foundation for Credit Counseling, the No. 1 financial New Year's resolution for 24% of borrower customers (who may be current or future homeowners) is to improve their credit score, up from 18% in NFCC's December 2010 poll.

The expectation is that if, as data show, customers are becoming more aware of their financial health, it bodes well for the mortgage banks, too, as it leads to less delinquencies driven by lack of knowledge.

The counseling agency also reports that 62%, compared to 69% in 2010, indicated that decreasing debt was their primary goal and only 6% of the over 2,300 respondents stated that decreasing dependence on credit cards was their No. 1 goal, down from 7%.

Increasing savings tipped up in priority status to 8% of the respondents up from 7%, which is not a good sign. It reiterates both hardship and a lack of knowledge that “is disturbing” to insiders like NFCC's Gail Cunningham, even though “paying down debt and improving the credit score are positive steps.”

At first glance these findings seem to be “a warning sign of future trouble,” she argues, but credit is not the problem, the misuse of credit that leads people into financial distress is. Hence, the road ahead towards financial literacy is going to be long.

Equally challenging is the road towards updating and restructuring a business model so it can survive and prosper in 2012.

Whether it is about making the right business decisions for “a high-impact quick win, or strategies for long-term growth,” says Stan Oliai, senior vice president and general manager of Experian's Global Consulting Practice in North America, it is equally important to rely on “deep expertise” and the ability to maximize the company's broad resources of data, analytics and software technology.

Acting on the belief that executives of small- to medium-size mortgage companies may benefit from the assistance of business counselors who have the knowledge and can help understand the consequences and outcomes of business decisions, the Costa Mesa, Calif., business credit risk management company that specializes in data, analytics and fraud prevention launched its North American consulting practice.

The Experian Global Consulting Practice provides analysis that draws on the company's financial services, banking, mortgages, retail cards and payments, automotive finance, small business, telecommunications, utilities and government that is delivered by experts with an average 20 years of grassroots experience in their specific field.

Experian's consulting experts offer guidance in three directions: business review to identify and evaluate return on investment opportunities, strategy design that helps build the tools needed to support strategic goals and strategy reviews.

Market insights reached through data analyzing and interpretation, along with best practices are invaluable through the life cycle of the business, says Oliai, since analytics and data-driven solutions take into consideration regulatory compliance and fraud risk management.

In the end, these insiders agree, that “knowledge is power” saying rings truer than ever.