Lynn, MA Mediation Law Faces Revocation
Updated 3/19/18: MA S.884 (An act clarifying municipal authority regarding cash sureties and foreclosures) has replaced S.2396 in the Massachusetts Senate.
Updated 6/29/16: Mass Live released an article titled Foreclosure bill passes state Senate.
Updated 6/8/15: Telegram.com (Worcester) released an article titled Worcester reworks ordinance on maintenance of vacant properties.
Link to ordinance text [pdf]
Updated 5/12/15: Telegram.com (Worcester) released an article titled Federal judge halts Worcester foreclosure ordinance.
Updated 3/2/15: The Boston Business Journal released an article titled Eastern Bank, others seek to put stop to Lynn foreclosure law.
February 6, 2015
Council asked to foreclose on city ordinance
LYNN — A city law aimed at helping residents facing foreclosure stay in their homes appears to be headed to the scrap heap with city lawyers urging city councilors to revoke the ordinance and avoid potential legal action by banks opposed to local foreclosure mediation programs.
“There is no question in the mind of this office that the (U.S.) District Court will strike down the Lynn ordinance,” city attorney James Lamanna said Thursday.
Council President Daniel Cahill said he is aware of the law department’s concerns about the effect last year’s Supreme Judicial Court ruling on the city of Springfield’s mediation ordinance will have on Lynn’s two-year-old law.
“The argument is state law preempts local foreclosure mediation. I have no interest in getting the city into more lawsuits. It is clear that the banks, if we were to try to continue, would most likely pursue legal action against us,” Cahill said.
Cahill did not say specifically when the council will debate any proposal to scrap the ordinance, noting he wants to discuss it with one of its chief supporters, Ward 6 councilor Peter Capano.
The council’s next meetings are scheduled for Feb. 10 and 24.
The Supreme Judicial Court ruled last Dec. 19 “…that the foreclosure process is wholly a matter of State regulation absent an expression of a clear intent to allow local regulation.”
The court decision did not mention the Lynn ordinance, but Lynn and the city of Worcester face challenges by seven banks — including Eastern Bank — in federal court with the banks seeking to have the local ordinances declared invalid and unconstitutional.
“There’s really not a response we can make given the SJC decision,” Lamanna said.
That’s not entirely true, said mediation advocate and Lynn United for Change organizer Isaac Hodes. He said parts of the Lynn ordinance are “survivable,” in terms of a judicial review, including “unnecessary vacancy” language aimed at allowing homeowners facing foreclosure to remain in their homes and pay rent.
Hodes conceded the blow the court decision delivered against the Lynn ordinance is a heavy one.
“The decision, unfortunately, means local mediation programs cannot continue at this time,” he said.
Passed by the City Council in 2013 over Mayor Judith Flanagan Kennedy’s objections, the Lynn ordinance requires homeowners and mortgage holder representatives to sit down and try to resolve overdue and delinquent mortgage payments before foreclosure can occur. If mediation is unsuccessful, the bank can proceed with foreclosure, but a certificate of mediation is issue. Southern Essex Register of Deeds John L. O’Brien Jr. has not filed foreclosure deeds if he does not receive certificates from banks.
Hodes said Massachusetts Dispute Resolution Services, the organization the city picked to handle mediations, has heard 35 cases since the program actively began last May, and Cahill said all 35 resulted in mediation.
“It’s been highly successful, and a lot of people have been involved in this,” Cahill said.
Eastern Bank spokesman Joe Bartolotta on Thursday declined to comment on the law department’s recommendation to the City Council until bank representatives become more familiar with it.
“It is best we wait until the council deliberates and comes to a conclusion. Our feeling all along is that it actually hurts homeowners in the long run if lenders have to adhere to 351 sets of rules — one for each community in the state — as opposed to one set of rules from the attorney general or (state) Office of Consumer Affairs,” he said.
Lamanna said Dispute Resolution is currently processing 30 Lynn foreclosure cases. Once they are mediated or a certificate of mediation is sent to O’Brien’s office attesting to a mediation attempt, no additional cases will be handled, if the council revokes the ordinance.