What truthful thing has he said to his family in the past 3 years? I hate to see him get away with it, but the guy is a pathological liar. A decent defense atty. will rip this "revelation" a new one.
No defense attorney can get around the fact that her blood was all over that apartment and that the defendant told repeated lies to investigators the morning of her "disappearance." I imagine his attorney is already looking for a plea bargain, but I don't think he'll get one.
I imagine the attorney, though, could try to make some argument that because he was in a mental institution he had a reasonable expectation of privacy, and will move to strike the confession on those grounds. Don't know law well enough to say how that would do, but it seems shaky.