During the darkest days of the housing crisis, counselors for the Homeownership Preservation Foundation (HPF) were fielding thousands of calls every month from people across the country who were on the verge, or in the throes, of a mortgage nightmare.
With that crisis a distant memory, the HPF shifted its focus to other issues, including help to people who are still struggling to make ends meet, polish their credit or qualify for a mortgage.
So for the first time, the organization is using digital technology to make that happen.
Last month, the group launched a free app called BluePrint by HFP, which enables users to consolidate all of their personal financial information into the digital equivalent of a single file drawer. In addition to being able to access investment, banking and other accounts, the app makes it easy to create budgets, personal financial statements and other tools that are aimed at managing your personal finances, including savings and debt.
"We are really capturing an opportunity to provide that technology, and we know consumers have embraced this technology," said Ken Duncan, HPF's CFO.
Such personal finance tools are ubiquitous today, and there's no shortage of companies that are able to produce such products. But it took years to find a company well-suited to the needs of the nonprofit.
The biggest challenge was finding a company that had developed a product aimed at helping consumers and measuring outcomes vs. using the technology as a means to share information and sell services.
HPF partnered with an established software company called MX, which rebranded an app that was already in use. MX partners with more than 650 financial institutions, mostly banks and credit unions, but they also specialize in training and marketing.
HPF claims that it offers several advantages over others that are already on the market. A powerful "aggregation engine" is constantly pulling, cleansing and categorizing spending transactions. Once a budget has been established, the site gets automatically updated every time you open the app, which will send an e-mail alert when you've exceeded your budget. Though BluePrint was formally launched just last month, the HPF also says that MX users gain an average 20 percent increase in savings during their first four months of use.
The HFP is headquartered in the Twin Cities, has an office in Washington, D.C., and 185 branch offices in 40 states, enabling app users to tap into that network of counselors when they need help.
The goal, according to HPF's chief executive David Berenbaum, is to help people stay current on their bills to avoid default and to improve their credit scores so they can buy a house with the lowest possible interest rate. Those with dinged credit often pay a high rate to compensate the lender for the higher risk of a default.
"HPF's goal is to help all consumers better manage their spending and debt to move more quickly toward achieving their personalized vision of the American dream of home," he said.
The partnership between these nonprofit and for-profit entities is in a broader sense a reflection of a radical shift in the way people manage their money, and changes in the needs of HPF's customers.
Since it was founded in 2004, the HPF has connected more than 3.3 million families to a variety of social service and housing counseling agencies. Last year alone, the organization made 500,000 referrals, about 100,000 fewer than the previous year, but the nature of those calls has changed.
About two years ago, the center started seeing an increase in the number of calls from people who haven't been able to buy, especially young adults who are saddled with student loan debt and bad credit and are unable to buy a house.
The organization is also seeing a troubling number of seniors and retired baby boomers who are stuck in unsustainable situations. Many of them still don't have the equity, income or savings to downsize into a house that's more suitable for aging in place. Learning more about their spending — and savings — habits is a first step toward helping at-risk consumers solve their financial problems and avoid future pitfalls.
"Other providers of this type of technology gather their this data for purposes of trying to sell them another financial product," Duncan said. "We gather this data for the purpose of trying to make sure that they improve their financial life."