Activists Call For Pre-Foreclosure Mediation in Worcester
Wednesday, March 06, 2013
An ordinance, modeled on a similar law that was passed but has yet to be instituted in Springfield, was introduced in October of last year and sent to the City Solicitor's office for review, but proponents of the measure are still waiting to hear back.
"This is a good thing for our city," said District 4 Councilor Sarai Rivera, who has been one of the ordinance's supporters.
Rivera and Mayor Joseph Petty placed an order on Tuesday's agenda requesting City Manager Michael O'Brien request that City Solicitor David Moore to provide the Council with an update concerning the request for an amendment to the City's foreclosure ordinances to enable pre-foreclosure mediation. Several other Councilors signed onto the order as well.
In such cases, the City would be notified when a homeowner falls behind on their mortgage and is issued a right to cure notice by their bank, beginning a 150-day period to get payments back on track or their loan modified. The City would then engage a mediator to work with the lender and homeowner to pursue a solution or loan modification to avoid foreclosure.
The difference between a home and foreclosure
Currently, the City is not notified of potential foreclosures until the foreclosure petition is filed after the 150-day cure period is over. With many distressed borrowers recounting tales of the difficulty of even getting a hold of the right person at their bank to pursue loan modification during the 150-day window, the mediation could be the difference between homeownership and foreclosure.
"If I was able to sit down and talk with someone, then I would be a much better place," said Mildred Collins, of Worcester, who lost her home to foreclosure after her loan changed hands in the middle of an open loan modification that would have potentially enabled her to stay.
Christine Friend, who had her Worcester home foreclosed on in 2009 while she was also in the middle of negotiating a loan modification, said that had such a mediation program been implemented at the time, she would still be in her home as well.
"We want an economically stable city," said Rivera, noting that pre-foreclosure mediation would provide an opportunity to contribute to that stability by keeping homeownership and tax revenues up and reducing the number of vacant and abandoned buildings.
According to the Councilor, a similar optional mediation program has been implemented in Connecticut, and now 83 percent of borrowers who opt in and later face foreclosure are able to remain in their homes through loan modifications and other means.
In Massachusetts, on the other hand, only 20 percent of borrowers who apply for loan modifications receive them, according to WAFT's Jon Marien.
"That's just unacceptable," he said.
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- Investigation: 5 Banks Accused of Fraudulent Foreclosures in MA