Mediator: Foreclosure talks could start in May

LYNN – The city?s new foreclosure mediator is optimistic the “vast majority” of local homeowners willing to sit down and talk about their financial problems with bank representatives can work out alternatives to foreclosure under a new city program.Since the City Council made mediation law last May, bank notices sent to 106 Lynn residents facing foreclosure have also been sent to the city. The task of helping homeowners try to resolve their mortgage problems with their lender falls to Massachusetts Dispute Resolution Services, a 24-year-old Salem and Boston mediation company that signed a contract with the city last week.?Ours is the first foreclosure resolution launched in Massachusetts. We believe this process can be very beneficial to both sides,” said Dispute Resolution Director Brian Jerome.Southern Essex Register of Deeds John O?Brien shares that view and has publicly vowed to not file foreclosure deeds submitted to his office unless a city of Lynn certificate of mediation is attached to the deed.Under the law, even if mediation is unsuccessful, a certificate will be attached to a foreclosure deed indicating an attempt at resolution was made.The Massachusetts Bankers Association opposes Lynn mediations, and spokesman Bruce Spitzer said mediation is a resolution process better left in the hands of state regulators.?Individual cities and towns doing this is overkill,” he said.Jerome said Dispute Resolution is a month away from scheduling its first mediations around a table in Lynn City Hall. The mediator is contacting local homeowners facing foreclosure to determine if they want to participate in mediation.He said several homeowners have already expressed interest in mediation. Anti-foreclosure organizer Isaac Hodes said residents he has met want to take part in mediation.?These people have been getting the runaround from their banks for a long time, so they?re looking forward to cutting through the bureaucracy with a face-to-face meeting,” Hodes said.Spitzer said association member banks currently work with homeowners to attempt to resolve mortgage payment problems.Jerome said the mediation process will begin with a conference call aimed at ensuring bank officers and homeowners bring the required financial paperwork to the mediation meeting.The meetings will last about two hours, Jerome said, and banks will pay the $650 mediation fee covering Dispute Resolution?s services.Successful resolution, Jerome said, does not necessarily mean modifying the terms of a mortgage to allow a homeowner to remain in his or her residence. Some homeowners could conceivably agree to “short sales” or “consent foreclosures” designed to preserve their credit and minimize additional financial risks.?There are some situations where a mortgage is just not saveable,” he said.He said mediation is also a chance for lenders to minimize financial losses associated with foreclosure and the burden that abandoned property poses to banks.Spitzer said Lynn officials should delay local mediations until the state Court of Appeals rules on legal challenges to the city of Springfield?s mediation law. He declined to say whether the association will file legal challenges to Lynn?s ordinance.?We continue to evaluate all of our options,” he said.Hodes said he hopes local lenders will “step forward and help to make this program work” by proving that mediation can help homeowners, banks and “the whole city.”