As expected, the Mass. Bankers Association is protesting two new anti-foreclosure ordinances passed last month by the City Council.
Pete Goonan reports in the Republican that the banking group has written to the city Law Department questioning the legality of the ordinances, which went into effect this month. One of ordinances requires lenders to participate in a city-facilitated mediation process before it can foreclose on a property owner. The second requires lenders to put up a $10,000 bond to ensure that they’ll keep vacant foreclosed properties in good shape.
In a letter to City Solicitor Ed Pikula, the Mass Bankers Association contends that the Council overstepped its authority in creating the ordinances, and calls for the requirements to be tabled “until such time that the city of Springfield has fully examined the myriad of legal, financial and operational issues which are inherent in these ordinances.”
Actually, that examination has already happened, say the ordinances’ backers. In a joint press release, the anti-foreclosure group Springfield No One Leaves and Ward 6 City Councilor Amaad Rivera, lead sponsor of the ordinances, said, “This legislation has been vetted by local and statewide attorneys and by foreclosure experts at a national level. Similar ordinances passed in Worcester, Boston and other municipalities have been implemented without legal challenge.” Indeed, the release noted, mandatory mediation programs are not unusual, and can be an effective way to keep people in their homes under a new payment plan.
Rivera told the Republican that banks had been invited to attend a subcommittee meeting about the ordinances before the Council vote, but none showed up. A public forum will be held on the matter, Goonan reported.
The advocates’ statement went on to note that, of the member banks who signed the Mass Bankers Association challenge, only one—the notorious Bank of America—actually holds title to any foreclosed homes in Springfield. “This letter shows that Bank of America and the other big banks are willing to spend unlimited sums of money to put forward a frivolous lawsuit to avoid accepting responsibility for their role in destroying our community. The people of Springfield took concrete steps to hold the big banks accountable for their predatory practices, and we will not be deterred by threats from the very institutions that seek to bankrupt the city of Springfield,” Candejah Pink, whose house was foreclosed on, said in the release.
If they stand, the ordinances wouldn’t just benefit struggling homeowners, who’d have the opportunity to try to get back on track with workable payment plans. They’d also help spare neighborhoods the negatives that come with vacant, boarded-up houses, which can attract crime and drive down property values, by reducing the number of foreclosures, and by forcing lenders to keep those properties that are foreclosed on in good shape.
“I think the new foreclosure ordinance is great,” Sheila McElwaine, a long-time Forest Park civic activist, told the Advocate after the Council vote. “By penalizing lenders who empty foreclosed properties in the hope of just walking away, the required $10,000 bond gives the city and neighborhoods lots more juice.
“My husband and I have been stunned by the sudden spike in boarded-up houses, so to us the beefed-up version of the existing ordinance is very welcome,” McElwaine continued. “We’ve lived between long-term vacant houses for several years and found we had to be constantly on guard against human and animal intruders, so the fewer vacant houses the better as far as we are concerned.”
