RSI's Foreclosure Mediation Program: Practicing What We Preach

When the Illinois Attorney General announced in July 2012 that settlement funds would be used to support the incubation of foreclosure mediation programs in the state, RSI jumped at the opportunity to apply our knowledge and do what we had long been advising others to do. It was time to practice what we preach.

Program Parameters

The terms of RSI’s grant from the Office of the Illinois Attorney General were daunting. We would need to double our staff, double our budget, establish office locations in three more counties, and directly administer mediation programs for the first time. But we rose to the challenge, conducting the most successful program in RSI history. 

The basic parameters of the grant were these:

• For three northern Illinois judicial circuits, RSI would:
  • Work with courts and other stakeholders to design mediation programs
  • Administer foreclosure mediation programs
  • Work with housing counselors and legal aid attorneys to assist homeowners who participate in the foreclosure mediation programs
• For our own programs and for programs operated by our two downstate partner organizations, RSI would:
  • Train mediators
  • Develop an online case coordination and monitoring system to manage cases and collect data necessary for program evaluation
  • Evaluate all the programs and develop ways to improve them

Measuring Success

Conducting sound evaluations of court mediation programs, resulting in actionable recommendations, is embedded in RSI’s DNA. Thus, we needed look no further than our own organization to conduct a comprehensive formative evaluation of the Illinois Attorney General-funded foreclosure mediation programs for reliable indicators of success, as well as recommendations for ongoing improvement. This report is an example of a truly comprehensive mediation program evaluation that RSI recommends every court alternative dispute resolution (ADR) program conduct at least once.

Along with the evaluation, we can look at two other factors to answer the question “Did we practice what we preach?” We can explore whether we accomplished all the tasks set out in the grant, and we can look at whether our work aligned with our principles.

RSI Evaluation — Did We Accomplish Program Goals?

RSI’s undertook two evaluations, Six Programs, Six Models (2015) and Saving Homes, Building Understanding (2018), to comprehensively answer the question of whether foreclosure mediation accomplished its goals. These evaluations demonstrated that homeowners who complete the programs are likely to keep their homes. In one of the three programs RSI administered, more than three-quarters of homeowners who participated in mediation reached an agreement to keep their homes. In the other two programs, about half the homeowners who completed the program kept their homes. Considered in the context of how dire the situation is when a homeowner has made it as far as foreclosure court, helping so many homeowners retain their homes is a stunning victory.

Because these are mediation programs, not homeowner advocacy programs, it is important to keep in mind what success means to all the participants. Importantly, home retention is not only good for homeowners; it is good for lenders and communities, too. Home retention provides the lender with a performing loan, rather than a bad loan to write off, and it reduces the likelihood of neighborhood blight that often accompanies multiple home foreclosures in a community.

It may be more difficult to see the value in not retaining a home, but coming to an understanding of what is going to happen to a home is beneficial for all the participants. For a homeowner who has been struggling to communicate with the lender, getting a clear answer can be very valuable. Plus, the confidential setting of mediation offers homeowners a more dignified setting than open court in which to learn that they will not be able to retain their home. For the lawyers and lenders, knowing what their next steps are with the case is valuable.

“Homeowners who complete the programs are likely to keep their homes.”

Determining whether a home will be foreclosed upon is not the only goal of foreclosure mediation. Here are some examples of other goals, and how the Illinois programs met them:

• The process must be fair.

Across the board, the programs offered homeowners a fair opportunity to save their home. The programs also changed the homeowners’ experience with the foreclosure process to one in which they have some control and are treated fairly and with respect.

• Homeowners must be well-informed.

Each program also assisted homeowners in understanding  heir situation and what options they had.

• Agreements must be reasonable and attainable.

The programs facilitated communication between homeowners and lenders, so that parties could come to an agreement that was practical and beneficial for both parties.

• The program should not delay the court process.

Programs accomplished all these goals while moving the cases through the programs expeditiously — on average, in about three months.

Program Tasks — Did We Do What We Said We Were Going to Do?

RSI was in a strong position when we set out to accomplish these program tasks. We had thoroughly researched foreclosure mediation and we had assisted the Cook County, Illinois, program during its development. Also, we were fortunate that we had in place an experienced staff who shared a clear sense of our organizational mission and culture. As we grew, we continued to set high expectations for ourselves, rely on proven data and work as a team.

RSI succeeded in accomplishing all the tasks outlined in the program grant. For three northern Illinois judicial circuits, RSI successfully:

• Worked with courts and other stakeholders to design mediation programs in:
  • 16th Judicial Circuit, Kane County
  • 17th Judicial Circuit, Winnebago County and Boone County
  • 19th Judicial Circuit, Lake County
• Continues to administer the 16th Circuit foreclosure mediation program (the 17th and 19th circuits continue to run their foreclosure mediation programs after having absorbed them into their judicial operations)
• Continues to work closely with housing counselors and legal aid attorneys to assist homeowners who participate in the foreclosure mediation programs

For our own programs and for programs operated by two downstate partner organizations, RSI successfully:

• Developed and conducted two-day and five-day mediator trainings as needed for eight programs in the state
• Built a statewide online case management and monitoring system, adapting it to allow us to collect consistent information from all the programs around the state, each of which was operating on a different model, and produce consistent (“apples to apples”) statistical reports
• Conducted the first statewide evaluation of foreclosure mediation programs, providing implementable recommendations to each program about how to improve its effectiveness

RSI Principles — Did We Practice What We Preach?

During the more than two decades that RSI has worked in court ADR, we have developed a set of guiding principles that support our mission — “Strengthening access to justice by enhancing court alternative dispute resolution systems.” The following examples provide evidence of how RSI has followed those principles and how we practice what we preach in our foreclosure mediation program.

• RSI Principle: Information is power

Long before the Attorney General offered to support foreclosure mediation, RSI was researching what other states were doing to develop dispute resolution programs to address the foreclosure crisis. We analyzed that information and made it available online so anyone could use it. We also used this information to help Illinois’ jurisdictions adapt foreclosure mediation to the needs in their particular settings and to their particular strengths.

As the programs developed, we collected data and made it available in regular statistical reports. Although these reports are purely data, not analysis, they paint a picture of the different programs and their strengths and challenges. For each program, they provided information on the number of cases at each stage and the timing of the cases moving through the program.

• RSI Principle: Court ADR programs must be maintained, monitored and refined on a continual basis

The following three components are examples of how we maintain, monitor and refine our foreclosure mediation programs.

Maintenance: We hired a skilled, knowledgeable staff person to administer each program. This day-to-day focus on maintaining a reliable system of case management is critical to the stability and accuracy of each program. For every program, there is a person who keeps their eye on the ball.

Monitoring: We designed a statewide, online system to track case data. This allowed us to compare “apples to apples” among very different program models.

Refinement: We collected the data from all the programs monitoring, analyzed it and presented every program with actionable steps to take to improve program function. Some of the programs could be improved by adopting the strengths of other programs. For example, a program with a very low homeowner participation rate was able to more clearly see the barriers in its program design when it looked at how a program with a high participation rate worked, and it could adopt the other program’s approach to improve its rate of homeowner participation.

• RSI Principle: ADR should never be a barrier to justice

The evaluation of the programs found that cases moved through the mediation process expeditiously. The cases ranged between 77 and 142 days from when participants first entered the program to when they either reached agreement or left it without an agreement. There is no evidence that the mediation programs delayed the processing of foreclosure cases through the legal system.

• RSI Principle: Courts have a special responsibility for the quality of an ADR program

The formative evaluation of the programs found that, almost without exception, homeowners reported being treated fairly and with respect. In each program, most homeowners felt they were being respected and had the chance to talk and be heard. Their comments spoke of their appreciation for those helping them. Homeowners also appreciated the process itself for helping them understand their situation and how to proceed, and for allowing them to meet face-to-face with their lender. Almost all said they were satisfied with the process and the outcome.

• RSI Principle: ADR is not the answer to every problem

Even though these programs are called “foreclosure mediation,” mediation is only one part of a much larger effort to bring homeowners and lenders together to address what would happen to each home on a case-by-case basis. Homeowners might meet with a housing counselor several times to gather all the documents necessary to apply for a modified loan. They might receive legal information prior to mediation or be represented by a lawyer during the mediation process.

With all this preparation, the actual mediation is still often the only time that all the parties — homeowners (and their lawyer if they have one), the lawyer for the lender and a representative of the lender — all focus on one particular case. This opportunity to communicate directly about the intricacies of a particular case is a hallmark of foreclosure mediation that distinguishes it from any other effort to address foreclosure.

Conclusion

In the three jurisdictions where RSI administered foreclosure mediation programs, the courts elected to continue the mediation programs even after financial support from the Attorney General had concluded. This commitment to continuing these programs is one more indicator of the success of foreclosure mediation in the state.