Just the other day, I learned the term “sunk-cost bias” and immediately thought of the mortgage foreclosure work that I do. The term was new to me, but the concept was not: sunk-cost bias describes why it’s so hard for us to walk away from something and cut our losses (and explains why I spent 3 hours waiting in line for the Indiana Jones ride at Disneyland). With sunk-cost bias, our minds go through a process of telling us that we should hold on because otherwise the time, money and energy already invested would be a waste, even when such a decision is irrational and just sinks us further in the hole. The concept can have very real implications for more serious life choices, like whether or not to remain in a home once in foreclosure. (more…)
Posts Tagged ‘foreclosure mediation’
Be Mindful of the Sunk-Cost Bias Trap
Just Court ADR, June 18th, 2014Resolution System Institute’s Evening of Firsts
Susan M. Yates, June 2nd, 2014
Susan Yates and Judge Morton Denlow listen to Illinois Attorney General Lisa Madigan
Last Wednesday was a great evening for RSI! We held our first-ever “friendraising” event and presented our first-ever RSI Appreciation Award. Our generous friends at the Chicago office of the Skadden Arps law firm kindly hosted a beautiful reception for about 60 people. This was our first reception designed to introduce RSI to new friends in the Chicago corporate and legal world. Attendees included lawyers from some of Chicago’s largest corporations and law firms, judges from the counties where RSI conducts foreclosure mediation programs, and RSI’s own Board and staff members, with a sprinkling of local neutrals, funders and others. The two highlights of the program were remarks by the Illinois Attorney General and the presentation of the RSI Appreciation Award. (more…)
Foreclosure Mediation Programs Reflect and Refine
Just Court ADR, April 22nd, 2014Foreclosure mediation programs can now be found all over the country. Models vary widely, both in their rules and procedures and in terms of the populations they serve. Most programs were started as a response to the mortgage foreclosure crisis and some programs have been around for a number of years now. While it’s often argued that the worst of the housing crisis is behind us and that foreclosure mediation programs are no longer necessary, new studies are revealing that the need is there, that programs can be effective, and that there are lessons to be learned in terms of how programs can maximize results.
Maine is one state evaluating its foreclosure response and concluding that foreclosure mediation is having a positive impact. (more…)
Yes, It Can Be Done: Ten Program Models, One Online System
Jennifer Shack, March 12th, 2014When Resolution Systems Institute received a grant from the Illinois Attorney General to develop foreclosure mediation programs across the state, it was our opportunity to practice what we preach. From RSI’s inception, we’ve been telling courts that they need to monitor and evaluate their mediation programs to ensure that they’re providing quality services to those who come to them to resolve disputes. We’ve also been urging them to incorporate the development of a monitoring and evaluation system into their program design process. Too often, courts have decided against doing this, or have settled for a system that collects minimal data, such as number of mediations and number of settlements. The main problem has been lack of staff and money to develop and maintain such a system, as well as, perhaps, a lack of understanding of what it could provide. (more…)
