Worcester city manager opposes foreclosure mediation ordinance

| Aug 22, 2013 | Foreclosure

As previously discussed on this blog, trends in the local and national housing markets suggest that things are improving. Here in Worcester, however, foreclosures continue to be a big problem for some homeowners. Members of the city council have been attempting to propose new ways of helping people subject to foreclosure stay in their homes.

One proposal from several city council members was a new ordinance that would require lenders to work with homeowners in mediation before foreclosing on residential real estate. The goals of the proposed ordinance were to give local homeowners the opportunity to keep their residences and reduce the incidents of predatory foreclosure in the community.

City Manager Michael V. O’Brien has opposed the proposal and does not believe that the city can support such a program given its economic situation. The Worcester Anti-Foreclosure Team, a community group that supports the proposed ordinance, has pushed for the ordinance on several occasions.

The city manager has not outright rejected the proposal from ever becoming codified though he and his administrators have looked into other city and state foreclosure programs to investigate what was working for other communities. The results of their investigation suggested that mediation programs are difficult to sustain.

Noting that there are also legal barriers to implementing a foreclosure mediation program in Worcester, the city manager found that the city’s Foreclosure Bond Ordinance cannot be revised for mediation funding as the city does not have the authority to tax above an established limit. In lieu of the proposed ordinance, the city manager suggested that the city keep working with all lenders and homeowners to resolve foreclosure issues.

As the city continues to combat its foreclosure problem, the Worcester Anti-Foreclosure Team may attempt to find additional support for the proposed mediation ordinance. As the city manager has not fully dismissed the possibility of its adoption, Worcester residents will have to wait to see what happens regarding this interesting aspect of foreclosure policy.

Source: Worcester Telegram, “Worcester won’t back mandatory mediation for foreclosures,” Nick Kotsopoulos, Aug. 19, 2013