A Debt-Free College Education? Persistence is Key

We were moved by an article on the Opinion page of The Wall Street Journal late last month. Entitled, “It’s Possible to Graduate Debt-Free. Here’s How” it details one young woman’s persistent effort to finish college without debt. She succeeded, but the work it involved seemed to us nothing less than Herculean. Online classes, going to a different college freshman year because of an attractive scholarship, searching endlessly for additional scholarships, raising and selling cattle, full-time summer employment–all got her to her goal. (She didn’t mention meals of Ramen noodles, but the parent in us is not convinced she finished college without missing a lot of nutritious eats.)

After reading the article, we were left feeling a little hollow inside. While we applaud this woman’s tenacity and resourcefulness, we wondered how we–as a society that seems to value education–got to this point. Why are only 38% of student loan holders making payments? Why is student loan debt estimated to be more than $1 trillion? And how can any student without a trust fund make payments on loans of $40,000 a year? Many smart minds are seeking solutions, and others are joining MortgageKeeper in figuring out ways to help those who hold loans hold their own.

Here’s hoping we all work as persistently to find solutions as this young woman did to buck the borrowing trend.

Foreclosure is Down, Home Prices are Up. So Why is MK Breaking Records?

It’s a question we here at MortgageKeeper have asked ourselves. The Housing Crisis seems to be easing. Foreclosure is down. For sale signs in our neighborhoods are replaced by “sold” signs a lot faster these days. So why is the demand for MortgageKeeper reaching record levels?

To be sure, we’ve improved MK’s market coverage–160 cities and counting. We have more clients, and our data has a new interface that our users seem to like.

But this doesn’t explain why long-time users of our product are seeing their need for our product go through the roof.

The punchline: markets are up, but most Americans aren’t seeing their incomes increase. Poverty rates are still higher now than they were before the recession started.

The catalyst for past housing recoveries has been first time homebuyers. But where are they this time?  Answer: they are saving for a hefty downpayment. Typical first time buyers are middle income Americans–those with little savings and less-than-perfect credit. With these limitations, qualifying for a mortgage in this stricter environment can be almost impossible.

Many buyers this time around are investors or retirees–who are more likely to pay cash and win any housing bidding war (see this summary of a recent article in The Wall Street Journal).

So while a recovery seems to be on the horizon, MortgageKeeper continues to help thousands of struggling homeowners every day to find their financial footing–hopefully in time to take advantage of the sunnier housing outlook.

Single Women, Single Men, and Homeownership

I have many single friends–men and women. If I were to generalize among them, I’d say my single male friends tend to rent their homes, while my single female friends overwhelmingly own.

The National Association of Realtors has discovered the same thing. Their research found:

* Single women purchase at nearly 2x the rate of single men
* Single women made up 18% of households, while single men accounted for 10%
* Single women are more discriminating, with nearly half needing to “love” the house before they consider its value and cost. More than 75% of men considered value and cost first in their home buying decision.

These numbers are especially interesting when women’s salaries are only 82% of what the average man makes. As the article explains, “…women are ‘making the most sacrifices to get into a home, but they’re still placing a high value on owning a home of their own.'”

Does this research seem viable to you? Do your friends and acquaintances fit with these stats?

Recovery Brings More Foreclosures

As we continue to wonder if this recovery is here to stay, the insightful folks at RealtyTrac have shown us statistics that renew concern about foreclosure rates.

Foreclosures apparently are on the rise, as banks attend to a foreclosure backlog, and can repossess homes and resell them more easily in this improved market. In May, they say that 1 in 885 U.S. homes had a foreclosure filing. This is still good news: in Q1 2006, 1 in every 358 households was in foreclosure.

As we come to the end of another record quarter at MortgageKeeper, we can’t help but agree with this pessimistic outlook. In addition, we are noticing that the recovery varies from state to state, market to market, and sometimes even neighborhood to neighborhood. This is why local, targeted resources to help with a homeowner’s financial needs is more important than ever. So while things are looking up, there are still homeowners needing help.

Celebrating National Homeownership Month

Even as more and more Americans choose to rent their homes, homeownership still seems to be an ideal for which we strive. And for good reason–it builds and creates the strongest communities.

We’ve pulled together some of our favorite celebrations of the occasion on the Web for this week’s More Knowledge Blog. We hope you enjoy them.

* Money Management International (MMI) believes financial education to be a key to successful homeownership.

* Agriculture Secretary Tom Vilsack stresses the USDA’s “renewed commitment to providing safe, affordable housing in our small towns and rural communities.”

* Springboard Nonprofit Consumer Credit Management encourages pre-purchase education for prospective borrowers.

* NeighborWorks America promotes homeownership “the NeighborWorks way: prepare, invest, and retain.”

* In an interesting twist, The National Association of Exclusive Buyer Agents (an organization of real estate professionals who advocate for home buyers) offers five reasons not to buy a home.

* The Homeownership Preservation Foundation (HPF), the originators of the 888.995.HOPE Hotline, highlight the importance of third party, independent housing counselors in sustaining homeownership.

* HUD Deputy Secretary Maurice Jones announces the U.S. Department of Housing & Urban Development’s theme for Homeownership Month: Rebuilding the Middle Class.

* And here at MK? Yesterday (June 18) we saw 4,400 counselors search our MKDesktop product. The supplied 3,900 resource referrals to homeowners and renters in 20+ U.S. states looking for support, solutions and financial stability. We celebrate homeownership like this every day.

MK Customers Speak Out

Asking your customers to complete a survey is a little like asking your significant other if an outfit makes you look fat. You *think* you want to know the answer, but then again…!

We here at MortgageKeeper bit the bullet last month and asked our users how they interacted with our MKDesktop product–their likes, dislikes, and ideas for improvement. (MKDesktop gives professional counselors and customer service agents who work with distressed and transitioning homeowners the tangible, local resources they need to bring their household budget under control. The resources also address major life events like unemployment and natural disaster.)

A whopping 40% of our users responded. Here’s what we found:

96% agreed that MKDesktop is easy to use and that it provides their clients with helpful, local resources that
they would not have otherwise known about.

98% said the MKDesktop interface saves them time and returns local referral results quickly.

64% believed that MKDesktop referrals saved their average client more than $51/month, with 27% saying the amount was more than $250/month.

97% agreed that MKDesktop is reliable and available when they need it.

As far as improvements needed? More rental resources for those transitioning out of homeownership. Better copy/paste functionality. More up to date foreclosure law information. So our work for the next few months is very clear.

In the words of astronaut Neil Armstrong, “Research is creating new knowledge.” Thanks to our customers for making us smarter than we were before. We’ll use this information to make MKDesktop better than ever.