Lynn foreclosure rule to be challenged

LYNN – The city’s foreclosure ordinance is being tested in federal court, according to city attorney James Lamanna.”We have been told that there is a challenge,” he said Tuesday. “We have not been served the paperwork yet, but my understanding is there are two defendants, the city of Lynn and Worcester.”According to the complaint, which was obtained by The Item, seven banks, including Eastern Bank, have banded together and are asking the U.S. District Court in Worcester to declare that the anti-foreclosure ordinances are invalid and unconstitutional and that Lynn and Worcester should be forced to stop enforcing them until the First Circuit issues its order on the Springfield ordinance.Lamanna said the suit is similar to the Springfield case it references in which three banks joined together to sue the city over its foreclosure ordinance. The one major difference in Lynn’s case, however, is that while Springfield never got its ordinance up and running, Lynn’s has been operating successfully for about three months.Approved by the City Council in 2013 over Mayor Judith Flanagan Kennedy’s objections, Lynn’s mediation ordinance requires banks to reach out to property owners who are behind on their mortgages and give homeowners a chance to meet with a bank representative and work out a way to avoid losing their home.Massachusetts Dispute Resolution Services, a Salem- and Boston-based mediator, signed on to the program after the city agreed to tweak the ordinance a bit, including indemnifying the mediator so it couldn’t be sued, Lamanna said.”Which the new City Council did once it was sworn in,” he added.The mediators have been working ever since, and, according to Lamanna and Isaac Hodes from Lynn United for Change, there have been success stories.”We’ve already seen this law help Lynn families avoid foreclosure, and we’re going to fight to keep it going,” Hodes said. “Lynn United is working with people who are in the middle of negotiating with their banks right now specifically because of this program, and there are more homeowners waiting to set up mediations.”Hodes said he was surprised to find that Eastern Bank was part of the complaint. Bank officials could not be reached for comment. If the program is stopped, Hodes said, families will lose their homes to preventable foreclosures and neighborhoods will be dragged down by empty houses.Lamanna said, as far as he knows, there have been no complaints from local banks regarding the program. He also said he suspects that at this point there have been thousands of dollars invested in time and manpower in the mediation process, which has all been done lawfully and proper according to the ordinance. And that, he said, is why he is optimistic regarding the city’s chances in court.”I think we have a better case than Springfield,” he said. “I wouldn’t say I’m fairly confident, but we have an argument to be made ? our argument is every home we can save makes it worth it.”Hodes said Lynn United would continue to fight to help homeowners stay in their homes despite the lawsuit.”Homeowners should know that the program is still running, and they can contact Lynn United and (mediation program manager) Massachusetts Dispute Resolution Services about participating,” he said.