More Distressed Borrowers Look For Housing, Financial Solutions Online

More distressed homeowners are actively pursuing solutions to their financial needs, a promising 2011 trend expected to continue this year. And their starting point is the Web.

The 2011 Homeowner Needs Status Report based on information gathered by MortgageKeeper Referral Services, Downers Grove, Ill., a Web-based service that that connects struggling homeowners with qualified nonprofit and government agencies, showed that homeowners received 668,915 referrals in 2011—the most referrals ever requested in a single year. It marks a 67% increase over 2010.

Average daily inquiries for referrals to assistance delivered by local service providers increased 110% from 1,100 to 2,300. The firm’s director of marketing Lauren Blake Crandall has high expectations for 2012 given projections to see over 1,000,000 community resource referrals go through the system.  

Requests for servicer referrals make up about 40% of the 2011 total and continue to grow. 

The top-five referral assistance categories were housing and credit counseling, utility, employment, food and rental housing.

Other polls confirm these findings. A recent American Bankers Association survey shows that 62% of the banked population is using online banking. In addition, according to Wells Fargo, a growing number of homeowners are using the Internet to research mortgage loan options. Nearly 50% of the bank’s online customers visited its website to learn more about mortgage products and services.

Rochelle Nawrocki Gorey, president of MortgageKeeper Referral Services, called 2011 a year “for the record books,” in part due to new subscribers--including Bank of America and Saxon--helped to fuel some of the counseling inquiry growth. American Home Mortgage Servicing also signed up at the end of 2011, so AHMS usage numbers will add to the overall referral data later in 2012.

Other MortgageKeeper Referral Services subscribers are Ocwen Loan Servicing, the Homeownership Preservation Foundation’s 888.995.HOPE hotline and InCharge Debt Solutions.

Borrowers in financial distress are independently looking for access to opportunities to cure default.

“Across the board” subscribers saw their usage increase, Gorey said. Financial counseling offers distressed borrowers local assistance so they can improve their financial health and “more likely to get their mortgage payments back on track.” In seconds counselors and servicers who subscribe to MortgageKeeper’s database can offer homeowners contact information about nonprofits and government agencies located in their neighborhood or its surrounding area.

Economic hardship and foreclosure risks are promoting self-sufficiency.

Chase Card Services, Wilmington, Del., a division of JPMorgan Chase & Co., reports that more Americans are adding finances to their classic new year resolution goals of losing weight and living healthier lives—which nonetheless were the No. 1 goals, respectively, of 35% and 46% of the participants.

Up to 19% reported that managing their personal finances more effectively is their top priority in 2012. For example, 46% reported they will exercise at home or outdoors instead of a health club, and 59% would rather self serve at home than visit a spa.

This “do-it-yourself” strategy also means that many plan to rely on Web-based resources: 56% will take advantage of online coupons from retailers, 49% will use online banking or bill-pay and 41% will cash in on offers from online group deals.

The survey indicates, “Americans prefer to ‘do it themselves’ in 2012,” says Tom O’Donnell, general manager, Chase Slate.

Not only, most (of a nationally representative sample of 1,202 respondents) are not making any financial decisions based on social networking sites and personal conversations. The preferred source of advice for 47% of these consumers said they most often use online reviews to get informed about their choices, compared to 28% who would ask a friend. Only 5% would turn to social networks.