{"id":2608,"date":"2011-10-20T16:31:54","date_gmt":"2011-10-20T20:31:54","guid":{"rendered":"http:\/\/stateimpact.npr.org\/new-hampshire\/?p=2608"},"modified":"2011-10-21T13:54:31","modified_gmt":"2011-10-21T17:54:31","slug":"nine-essential-takeaways-from-the-feds-report-on-foreclosure-prevention","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/new-hampshire\/2011\/10\/20\/nine-essential-takeaways-from-the-feds-report-on-foreclosure-prevention\/","title":{"rendered":"Nine Essential Takeaways From The Fed’s Report On Foreclosure Prevention"},"content":{"rendered":"

Periodically, StateImpact New Hampshire likes to check in with the Boston Fed<\/a> to find out what forces analysts think are shaping the New England and national economies.\u00a0 And we stumbled onto this deceptively dry-titled little gem of a report by Robert Clifford: “State Foreclosure Prevention Efforts in New England: Mediation and Assistance<\/a>.”<\/p>\n

\"\"<\/a>

Amanda Loder \/ StateImpact New Hampshire<\/p>

This word cloud illustrates the overall focus of the Fed report. <\/p><\/div>\n

In his report, Clifford uses mainly New England examples to explain why some state foreclosure mediation programs work, why some don’t, and how states can fix their systems and prevent more foreclosures.\u00a0 Mediation, by the way, is when a neutral third-party helps negotiate an agreement between a lender and a borrower to prevent foreclosure.\u00a0 (And just FYI, Massachusetts is the only state in New England that doesn’t have some sort of state or city-headed mediation program).<\/p>\n

StateImpact read the whole Fed report, and came back with Nine Essential Takeaways:<\/p>\n

    \n
  1. \n
  2. These programs are new, but promising.\u00a0 And they’re spreading.<\/strong>\u00a0 By 2008, two years after the housing market started its downhill slide, only five states (or cities) even had a foreclosure mediation program.\u00a0 Connecticut and Philadelphia were early adopters, and their programs were so successful that by early last year, 21 states plus Washington, DC, had started their own programs.\u00a0 By the end of January, 2011, Connecticut had prevented 7,478 foreclosures.<\/li>\n
  3. Programs that favor the borrower are more successful than programs that favor the lender.<\/strong>\u00a0 There’s a lot of variation all over the country–and in New England–for who has the\n
  4. Telling a homeowner they can go to mediation doesn’t work.\u00a0 It’s better to automatically enroll them and force them to opt-out later<\/strong>.\u00a0 Voluntary participation doesn’t work very well for many programs, even if it’s in a person’s best interest to sign-up (just ask your job’s retirement fund administrator).\u00a0 That’s true for foreclosure mediation, too.\u00a0 Nevada has a huge foreclosure problem, and a voluntary mediation program.\u00a0 Only about 20 percent of people there who need to participate actually do.\u00a0 Philadelphia automatically enrolls delinquent homeowners, and the participation rate there is 70 percent.<\/li>\n
  5. Connecticut is a superstar.\u00a0 <\/strong>Of all six New England states, Clifford found that Connecticut has been the most successful at preventing foreclosure.\u00a0 By the end of January this year, 9,472 homeowners had completed mediation.\u00a0 About 79 percent of them somehow “avoided foreclosure.”\u00a0 And of those people, 64 percent got to stay in their homes.\u00a0 Only one out of five cases ended in foreclosure.\u00a0 As part of its foreclosure prevention efforts, Connecticut now funds two major financial assistance programs with millions of dollars from state coffers.<\/li>\n
  6. \n
  7. Success breeds success.<\/strong>\u00a0 The more foreclosures states prevent now, the more foreclosures states prevent in the future.\u00a0 Successful mediation gives policy makers the nudge they need to fund programs for more mediation or financial assistance.\u00a0 If intervention works, states can sometimes find creative ways to fund new programs or expand or revamp old ones to prevent foreclosure.\u00a0 If policy makers see that programs work, they’ll have the impetus to track down funding or create what Clifford calls “unique funding sources,” like lender fees, for mediation.<\/li>\n
  8. Information is key to determining success.\u00a0 <\/strong>Most states that have mediation programs\n
  9. Do everything in balance.<\/strong>\u00a0 Early intervention is best, since it gives mediation programs time to work before the situation’s desperate.\u00a0 There also needs to be time for mediators to dig into paperwork and for everyone to work out an agreeable solution.\u00a0 At the same time, the process shouldn’t last so long that the homeowner racks up additional, significant, debt.\u00a0 A balanced approach is also important when considering fees.\u00a0 Some states can (and do) levy fees against lenders and\/or borrowers.\u00a0 Fees that are too heavy, however, can hurt participation on both sides.\u00a0 And no fees can create a situation where programs are under-funded and less effective.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    Periodically, StateImpact New Hampshire likes to check in with the Boston Fed to find out what forces analysts think are shaping the New England and national economies.\u00a0 And we stumbled onto this deceptively dry-titled little gem of a report by Robert Clifford: “State Foreclosure Prevention Efforts in New England: Mediation and Assistance.” In his report, […]<\/p>\n","protected":false},"author":28,"featured_media":2632,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[53],"tags":[505,95,517,528],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/2608"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/comments?post=2608"}],"version-history":[{"count":16,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/2608\/revisions"}],"predecessor-version":[{"id":2637,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/2608\/revisions\/2637"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media\/2632"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media?parent=2608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/categories?post=2608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/tags?post=2608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}