A survey released today by Online Resources Corp. found that the mortgage crisis is spilling over into the broader economy, impacting companies across a variety of industries and their ability to collect payments.
The study of more than 1,000 nationally representative U.S. households found that American consumers are increasingly being forced to prioritize their bills by creating a “delinquency budget” to decide which bills get paid first.
And if forced to choose between which bills to pay, 98 percent of households said they would likely make their mortgage payment first, while credit cards, utility and healthcare bills are among the least likely to be paid.
The survey found that one out of four households reported being delinquent on at least one bill by 30 days or more.
Online Resources also studied a cross-section of billing clients from banks, credit unions, utilities, healthcare companies, card issuers, receivables management and mortgage lenders, finding that only two percent expect it to be easier to collect payments in 2008, while 84 percent expect to spend more on collections in 2008.
“Today’s challenging credit environment could pose a serious risk to companies in all recurring bill industries and their ability to carve out a priority spot in consumers’ budgets,” stated Matthew P. Lawlor, chairman and CEO of Online Resources.
“Billers who provide consumers with more options to resolve their delinquencies will have a distinct advantage in competing to win a priority share of the delinquency budget and also retain valuable consumer relationships.”
Interestingly, the survey found that billers are out of sync with how consumers would like to resolve their delinquencies.
The majority of consumers prefer to use the web to make delinquent payments because of its convenient and non-confrontational nature, but only eight percent of billers offer such online collections services.
These findings could help mortgage companies deal with the ongoing wave of delinquencies more effectively.