To settle a lawsuit by several banks, the city of Springfield Massachusetts may change an ordinance hailed as a national model for addressing the foreclosure crisis.
The city is considering exempting banks from a requirement to pay a $10,000 bond with each foreclosure. Banks would have to meet other conditions, such as hiring a local property manager. Former Springfield City Councilor Amaad Rivera, who was lead sponsor of the ordinance said the change is a loophole for the banks that does nothing to help neighborhoods blighted by foreclosures.
A mandatory mediation program to help people save their homes from foreclosure would be left intact under the proposed settlement. The program has not been implemented because of the lawsuit filed after the ordinances passed nearly two years ago.
