This week, Governor Jodi Rell issued a press release touting the success of the foreclosure mediation program in Connecticut. She claims a 75% success rate in mediating foreclosure cases where 2721 homeowners saved their home. Lies, damn lies, and statistics.
The report covers the period of July 2008 (when mediation become available in Connecticut) to the end of October 2009. In July 2009, mediation became mandatory in all residential foreclosures. During that time only 4,448 cases were put into mediation, yet over 32,000 foreclosures were filed in the state. So in reality, less than 14% of the cases were mediated at all.
If we define ‘success’ as the number of families that got to stay in their home versus the number of homes foreclosed, we can see that the success rate was really only 8.5%, not 75%! This is not a criticism of the mediators who work hard to get recalcitrant lenders to the table. Unfortunately, they are powerless to force the lenders to do anything at all. They should be commended for accomplishing anything in the face of the volume of foreclosures and the difficulty of a declining market.
Using the Governor’s methodology, the program has left 25% of homeowners in limbo and convinced 13.5% of the homeowners to leave their home. This is hardly a glowing endorsement of the state’s efforts.