Council Stands Behind Foreclosure Rules
City councilors last night confirmed their support of a pair of ordinances designed to address the city’s high rates of foreclosure.
The ordinances, passed in 2011, required that lenders participate in city-facilitated mediation with homeowners before foreclosing on their properties and that lenders who have foreclosed on properties post $10,000 bonds to ensure that they maintain the vacant buildings. They were passed in response to concerns about the number of people left homeless by evictions as well as the number of vacant houses in some city neighborhoods.
The Mass. Bankers Association sued the city over the ordinances, saying they violated state and federal law. Last summer, U.S. District Court Judge Michael Ponsor upheld the requirements, finding that the city’s Law Department had “made a sufficient showing that the Foreclosure Ordinance was necessary to protect a basic societal interest, was tailored appropriately to that purpose, and imposed reasonable conditions.”
The bankers group appealed Ponsor’s decision, and the two sides entered mediation, which resulted in a proposed settlement: the Bankers Association would drop the lawsuit if the city eliminated the $10,000 bond requirement, instead replacing it with a requirement that lenders register vacant properties with the city and identify a local property manager.
Last night, the Council voted unanimously to reject that proposal. The Bankers Association is expected to move forward with its legal appeal, although, as Pete Goonan reports in this morning’s Republican, the city can go ahead with putting the ordinances in effect. Previously, the city had held off on implementing the new rules because of the banks’ lawsuit.