The Illinois Attorney General’s grant for foreclosure mediation has so far resulted in five programs with five different service delivery models. This has had me, as evaluator of the programs, anxious to find out how the differences will affect program outcomes. Having just completed the first statistical report for the foreclosure mediation programs, my initial impression is that program model really does matter when it comes to many performance measures.
I primarily looked at four programs – the 16th, 19th, 20th and 21st judicial circuits – since the 17th Circuit program just started in June. (Full disclosure: the 16th, 17th and 19th Circuit programs are administered by RSI.) Each of the programs has a different model:
- The 16th Circuit (Kane County) has the program coordinator contact all eligible homeowners to educate them about the program. The homeowner must also file an appearance. Interested homeowners are then referred to housing counseling, although they don’t have to meet with a counselor to proceed. Once documentation is completed with the help of a housing counselor, and if no temporary payment plan is agreed upon, the case is then referred to mediation. Timelines in this model are long.
- In the 19th Circuit (Lake County), the homeowner must contact the housing counseling agency to register for a group informational session, and then follow up their attendance with a call to schedule a housing counseling session. Housing counseling is mandatory for homeowners who wish to use mediation. Once documentation is completed with the help of a housing counselor, and if no temporary payment plan is agreed upon, the case is then referred to mediation. Timelines in this model are shorter than the other programs.
- In the 20th Circuit (St. Clair County), the case is either ordered to mediation by the judge, which triggers program staff to contact the homeowner, or the homeowner receives notice of the program in the summons and must complete a request and financial questionnaire in order to participate in the program. Once in the program, a staff member meets jointly with the homeowner and lender’s counsel to determine what documents need to be exchanged, ensure the lender has reviewed the homeowner’s loan packet, and attempt to get an agreement. If the homeowner and lender do not reach an agreement within the three sessions allowed by rule and a loan modification is not a viable option, the case is referred to mediation if the homeowner is interested in pursuing other options.
- In the 21st Circuit (Kankakee County), all eligible homeowners are ordered to attend a pre-mediation screening session. If they appear, they meet with a mediator to discuss possible options and begin pulling together the loan packet. The mediator also determines if the homeowner has viable options to retain the home. Once documentation is complete and if the homeowner has viable options or the homeowner wants to explore the possibility of a graceful exit, the mediator schedules a formal mediation session.
For the four programs, I gathered data on four items:
- Participant experience with the program
- Program usage and completion
- Days needed to move through the programs
- Case outcomes: overall and specifically at the pre-mediation and mediation stages
Although I haven’t yet analyzed the data from the programs, it is easily apparent that program participants, including lender representatives and attorneys, are universally satisfied with their experience and the outcome of the mediation. That’s where the programs all converge.
The programs diverge on everything else. The 19th Circuit, which almost exclusively relies on the homeowner to make the first contact with the program, has the lowest usage rate (7%), while the 21st Circuit, which orders all homeowners to appear for a pre-mediation screening conference, has the highest usage rate (55%). However, the 21st has the lowest rate of homeowners retaining their homes and a high rate of homeowners dropping out. The 19th has a high rate of home retention and a lower dropout rate.
The 20th Circuit program excels at keeping homeowners in the program and in helping them retain their homes, but it has longer lag times and requires more effort by both program staff and the parties to get there. This model might work well with small programs, but may be harder to manage in a larger program like the 16th, which had almost three times as many homeowners contact the program in the same amount of time. The 16th, on the other hand, does well at getting homeowners into the program, but tends to lose them once they enter. I will have to do more analysis to understand why this is.
The 19th Circuit responded to lender concerns about cases dragging on too long in the mediation program by developing short timeframes for each stage. This has indeed led to the shortest average days cases spend to complete the program (either with an agreement or no agreement), at 50. The 20th Circuit averages 19 days longer and the 16th Circuit’s average is 22 days longer. Considering that the rules for these programs allow cases much more time in the program than the 19th Circuit’s rules, I was surprised that the difference between their averages and the 19th Circuit’s wasn’t greater. However, they both have a higher percent of cases still pending than the 19th Circuit program does. I suspect that their time to completion will lengthen in future reports.
The statistics also point to issues that need to be explored and addressed: why aren’t more homeowners taking part in the programs? What efforts can the programs take to bring more of them into the program? And what can be done to keep them in the program once they’re in? Because we are collecting such comprehensive information on Illinois’ programs, we will be able to track the effect of these differing models and any programmatic changes. I’m looking forward to digging into all these statistics in two comprehensive evaluations in the future.