Activists Seek Implementation Of Anti-foreclosure Law
A federal court ruling clears the way for the city of Springfield Massachusetts to implement a foreclosure ordinance. Housing rights advocates predict the local law will become a model for other cities and states struggling with the blight caused by foreclosed vacant property. WAMC”s Pioneer Valley Bureau Chief Paul Tuthill reports.
The Springfield ordinance requires financial institutions to post a $10,000 bond with each foreclosure. It is intended to cover the cost of securing and maintaining properties that have been abandoned following foreclosure. Up until now this expense, necessary for public safety and to stop the spread of urban blight has been born largely by city taxpayers, according to Amaad Rivera, the former Springfield City Councilor, who was the lead sponsor of the ordinance.
The ordinance also requires a mediation process that is intended to give people who can afford to pay something on a mortgage each month a chance to stay in their homes.
The ordinance was passed unanimously by the Springfield City Council last August and signed by Mayor Domenic Sarno. The Massachusetts Bankers Association and half dozen local banks sued the city last fall. Implementation of the ordinance was put on hold pending the outcome of the suit.
US District Court Judge Michael Ponsor, in a strongly worded decision issued earlier this week said the city had made a modest effort to soften the foreclosure crisis. He said the ordinance violates no Constitutional provision or state statute. An appeal is still possible, but Rivera, who now works for the Massachusett Commission Against Discrimination, said he the judge’s ruling left him exuberant.
Housing rights advocates say a member of Mayor Sarno’s staff has agreed to meet with them soon to discuss implementing the ordinance. Malcolm Chu, an organizer with Springfield No One Leaves, an advocacy group for people facing foreclosure, said there is no need to wait.
Chu said there is a lot of interest around the county in the Springfield anti-foreclosure ordinance. Springfield for several years had the highest rate of foreclosures in Massachusetts. The pace of foreclosures, nationwide, is expected to increase as lenders clear a back log of delinquent mortgages.
Joel Feldman, a Springfield attorney ,said mediation typically results in an settlement between the lender and the delinquent borrower to avoid foreclosure, but mediation happens infrequently.
David Dunwell believes he would still have his Springfield home, t if a mediation process had been required by law a few years ago when he was struggling to avoid foreclosure
The Springfield ordinance imposes a $300 per day fine on financial institutions that fail to enter into a mediation process with homeowners facing foreclosure.