Last month, the City Council passed a non-binding resolution urging mortgage lenders to impose a moratorium on foreclosures and foreclosure-related evictions in the city, to cut a break to already struggling homeowners in the wake of the June 1 tornado that hit the city.
Now, the Council is taking up a related matter, but with more teeth. At tonight’s meeting, councilors will consider an ordinance that would make it tougher for lenders to foreclose on residential properties in the city, which in 2010 had the most foreclosures of any community in the state.
Under the ordinance—which would need the approval of the state Legislature to become law—lenders could not foreclose on a home without first participating in a city-facilitated mediation process, and receiving a certificate “verifying the mortgagee’s good faith participation in foreclosure mediation.”
The mediation process “shall address all issues of foreclosure, including but not limited to reinstatement of the mortgage, modification of the loan and restructuring of the mortgage debt, including the reduction and forgiveness of mortgage debt,” according to the ordinance.
The program would be available to owners of single-family and multi-family houses, as long as the owner lives in the property and it has four or fewer units. Mortgage holders would pay up to 15 percent of the mediation costs, although no one would be denied access to the program because of lack of funds.
“The costs associated with foreclosed and vacant homes have a direct impact on both individual families and the city at large,” the anti-foreclosure group No One Leaves argues in a press release about the ordinance. “Families and communities are destroyed by the mass foreclosures being carried out by big banks, the city incurs significant costs to maintain these properties and property values decline significantly throughout the city.”
The ordinance is sponsored by Ward 2 Councilor Mike Fenton, Ward 5’s Henry Twiggs, Ward 6’s Amaad Rivera, at-large Councilor Tim Rooke and Council President Jose Tosado.
No One Leaves expects the measure to have enough votes to pass. The group will hold a rally in support of the ordinance on the steps of City Hall at 6 p.m. The Council meeting begins at 7 p.m.
