Innovative fintech platform automates payments to improve budgeting and financial health
MCLEAN, VA--(Marketwired - Oct 10, 2017) - Freddie Mac (OTCQB: FMCC) announced today a pilot with EarnUp, a financial technology company that helps consumers make loan payments on time and improve their financial health. Working through non-profit financial counseling organizations, Freddie Mac is encouraging low- and moderate-income earners to reduce the likelihood of delinquency while improving savings opportunities.
"The increasing rate of consumer debt and the low homeownership rate lead us to believe that average Americans could use help managing their debts," said Danny Gardner, vice president of affordable lending and access to credit in Freddie Mac's Single-Family Business. "We believe EarnUp's online platform is an innovative and convenient approach that may help the next generation of potential homebuyers meet their future goals."
Consumers can manage all their loans in one place using EarnUp and receive personalized recommendations on how to pay down their debts. The technology also automatically withdraws money from the consumer's account on payday, breaking down expenses into bite-sized payments, which ensures that each person stays current on their loans and avoids late fees.
"Our experience shows that people are more likely to stay current on their loan payments if we make it quick and easy for them to do so," said Matthew Cooper, co-founder and CEO of EarnUp. "EarnUp is proud to be working with Freddie Mac to provide technology solutions that can help consumers improve not only their credit scores but also their overall financial health."
Rolling out now, this collaboration allows a limited number of consumers to use EarnUp for free for 12 months by working through one of three non-profit financial counseling organizations:
- HomeFree-USA, which serves Maryland, Washington, D.C. and Northern Virginia,
- GreenPath Financial Wellness, which serves the Detroit metropolitan area, and
- InCharge Debt Solutions, which serves all other areas in the U.S.
HomeFree and InCharge are part of Freddie Mac's network of 14 Borrower Help Centers and the national Freddie Mac Borrower Help Network. These housing counseling agencies support Freddie Mac's commitment to preparing prospective buyers for long-term sustainable homeownership and helping struggling borrowers, including those with Freddie Mac-owned mortgages, avoid foreclosure.
"Experimenting on a relatively small scale allows us to easily evaluate the results," Gardner said. "With the insights we gain, we'll be better able to develop other initiatives to support low- and moderate-income consumers in the future."
News facts:
- Twenty-two percent of adults say their monthly income varies occasionally, and 10 percent say their income often varies quite a bit from month to month, according to a May 2017 report by the Board of Governors of the Federal Reserve System. Fifteen percent of adults have multiple jobs, and 10 percent are self-employed, according to the same report.
- Aggregate household debt increased in the first quarter of 2017 for the 11th consecutive quarter, finally surpassing the third-quarter 2008 peak of $12.68 trillion, according to the New York Fed's Quarterly Report On Household Debt And Credit.
- The U.S. homeownership rate was 63.7 percent in the second quarter 2017, compared to 62.9 percent in the second quarter 2016, according to the Census Bureau. American homeownership peaked at 68.9 percent in 2005.
- Founded in March 2014, EarnUp enables payments to 5,000+ banks and loan servicing platforms via its proprietary secure network.
- Ninety percent of EarnUp's customers are low- and moderate-income earners, according to an internal study conducted by EarnUp.
- Eighty-six percent of consumers are automating payments for the first time when they sign up with EarnUp.
EarnUp is a consumer-first platform that intelligently automates loan payments and identifies earning opportunities for the 200 million indebted Americans. EarnUp puts a few dollars aside for loans when consumers can afford it -- then makes timely payments to help consumers save and get out of debt faster. Based in San Francisco, EarnUp is backed by prominent Venture Capital firms Blumberg Capital, Kapor Capital, Camp One Ventures, and Fenway Summer Ventures plus other leading angels and entrepreneurs. EarnUp is a winner of the prestigious Financial Solutions Lab in partnership with JPMorgan Chase & Co. and the Center for Financial Services Innovation. For more information, visit www.earnup.com, email press@earnup.com, and follow on Twitter @EarnUp.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog.
MEDIA CONTACT:
Chad Wandler
703/903-2446
Chad_Wandler@FreddieMac.com
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