In the last two years, the six programs currently funded by the Office of the Illinois Attorney General have helped 476 homeowners save their homes. Almost 100 more relinquished their homes voluntarily, allowing them to make a fresh start. Combined, this means that the programs helped about 1/3 of participating homeowners – and their communities – to avoid the negative consequences of foreclosure. (more…)
Posts Tagged ‘Illinois’
Since I began my internship at RSI, I have embraced the organization’s mission of enhancing court ADR systems through program development, research and access to resources. I have worked on a variety of projects regarding different aspects of the RSI mission and have learned that in order to create new resources, a great deal of time and effort must be put into careful analysis and in-depth research of reliable information.
Over the last month, I focused my time and effort into creating a new resource: a full chart of the Illinois foreclosure mediation programs. Foreclosure mediation, which helps homeowners effectively communicate with lenders about their homes, is one specific area of court ADR in which RSI is deeply involved. RSI has been providing research and resources on foreclosure mediation programs since the housing crisis started and has successfully developed and now administers three foreclosure mediation programs in northern Illinois.
Currently, Illinois has a total of eleven foreclosure mediation programs throughout the state (below, you will find individual charts, or “snapshots”, for each of these programs). (more…)
The foreclosure mediation program in Cook County, Illinois, which serves Chicago and many of its suburbs, has done what all ADR programs should do. It has tracked specific measures of success, identified areas for improvement, made changes to make the program work better, then looked at the data again to see the effect of those changes. The program’s latest report shows that the changes have indeed improved what was perhaps its biggest problem.
In its first two years – 2011 and 2012 – the program suffered from long delays in case progression, with cases taking well more than a year to complete the program. The program consists of three stages: housing counseling to explain the foreclosure process and to help homeowners gather the necessary documents for lender review, legal aid counseling to determine whether the homeowners have any defenses to foreclosure, and mediation to facilitate negotiation between the homeowner and lender. Initially, homeowners and lenders almost always negotiated in mediation. Homeowners without an attorney were (and continue to be) provided free representation by volunteer attorneys at the mediation. The major cause of the delays was the lack of legal aid attorneys to represent the homeowners.
To remedy this, the court hired case managers in 2013 – attorneys who attend court hearings and triage the cases in which the homeowner is self-represented. If the homeowner has been trying to come to an agreement with their lender, the case managers then work with the homeowner and lender to ensure that documents are exchanged, communication is maintained, and required steps are completed prior to the next status date. Case managers can facilitate agreement between the homeowner and lender as well. The program also encouraged housing counselors who were helping the homeowners to facilitate agreements with the homeowners’ lender. These changes appear to have had a dramatic effect. The time to complete the program has been reduced to 12 weeks. A drop in filings has likely been an important factor in this, but there has also been a large increase in pre-mediation agreements over the past two years. These agreements have reduced the need for legal aid attorneys to represent the homeowners, opening up a bottleneck in case progression.
At the same time, the percentage of completed cases that end in an agreement increased tremendously, while the percentage of agreements that were for home retention has declined. The reason for these trends is not addressed by the report. Did the increase in facilitating agreement prior to mediation have an effect on outcomes? Has it had an effect on whether the homeowners complete the program? These would be interesting areas for the court and program to explore.
In the meantime, though, the county, the court and the program should pat themselves on the back for identifying areas for improvement and then implementing changes. It is often too easy to either terminate a program that has less than stellar outcomes or to let such a program wither and die.
There is a lot to be learned by reading RSI’s evaluation of the foreclosure mediation programs that are supported by a grant from the Office of the Illinois Attorney General. The evaluation, which was conducted and written by RSI’s amazing Director of Research, Jen Shack, is comprehensive, well-reasoned and insightful.
One thing that struck me is how the various programs use the term “mandatory” to describe mediation services. When I think of mandatory participation in mediation, I think of the typical family mediation program for contested child-related issues in which parents must attempt mediation (barring certain disqualifying factors) or the court will not move forward with their case. In foreclosure mediation, some programs call themselves mandatory, but court rules impose no negative consequences if the homeowners do not try mediation. (more…)
When it comes to foreclosure mediation, how a program is designed has a large impact on eligible homeowners. That was the broad finding of the evaluation of six foreclosure mediation programs in Illinois I just completed. The evaluation assessed the first year of the programs funded by the Illinois Attorney General, using data from an online case management and program monitoring system that allowed all but one of the programs to collect the same data using uniform definitions for each data point. The six programs are located throughout the state:
- The 6th Judicial Circuit (Champaign County only), serving a university town and a largely rural county in Central Illinois
- The 16th Judicial Circuit (Kane County), serving a large suburban Chicago community
- The 17th Judicial Circuit (Winnebago and Boone counties), serving Rockford, Illinois’ third largest city, in north-central Illinois
- The 19th Judicial Circuit (Lake County), serving a large suburban Chicago community
- The 20th Judicial Circuit (St. Clair County only), serving a suburban St. Louis community
- The 21st Judicial Circuit (Kankakee County only), serving a semi-suburban community south of Chicago
Each of the programs is designed differently, from how homeowners enter the program to what services they receive when they do. Their differences, combined with the collection of the same data for each program, provided insight on the effect of program design on participation, home retention and homeowner experience. The most interesting findings from these different models include the following:
Higher participation leads to higher impact
In the 21st Circuit, 68% of homeowners participate in the program, and 14% of all homeowners facing foreclosure in the program county were able to save their homes. The other programs have participation rates of 7% to 25% and between 2% and 6% of all eligible homeowners keep their homes. The 21st Circuit’s high rate of home retention for all eligible homeowners facing foreclosure relative to the other programs is due to its very high participation rate and not to proportionately better outcomes for homeowners who participate in the program. If only participating homeowners are considered, the 21st Circuit has the lowest percentage who keep their homes.
High barriers discourage participation
Programs whose required steps for participation are difficult for homeowners have the lowest participation rates. Those with the easiest steps have the highest participation rates.
One-on-one orientation and assistance with entry encourage participation
Programs that orient the homeowners to the program at their first point of contact have higher rates of homeowners who complete the entry process. In the 16th Circuit, almost 90% of homeowners who contact the program coordinator for an initial conference enter the program. In the 17th Circuit, homeowners receive assistance completing their application for the program, leading to a higher rate of participation than in the 20th Circuit, where many homeowners do not have contact with the program until after they complete the steps to enter.
Homeowners who receive services other than mediation are more likely to retain their homes
In the 20th Circuit, those homeowners who received assistance from legal services were more likely to retain their homes than those who did not. While not statistically significant, this was true as well for homeowners who received housing counseling in that program. In addition, in the 17th and 19th Circuits, where all homeowners receive assistance from housing counseling, the level of understanding they gained and their satisfaction with the service were extremely high.
Homeowners benefit from a second opportunity to participate
In the 20th Circuit, more than half of participating homeowners are referred to mediation by the judge at the default judgment hearing. They also are at least as likely to obtain a loan modification as those who enter the program after receiving their notification of mediation. This means that homeowners who could get a loan modification are selecting themselves out of the mediation programs and should be given another opportunity to participate.