Small banks complying with Lynn foreclosure law

LYNN – Small local banks are complying with the city?s foreclosure mediation law, according to the firm overseeing it, even as the law faces a court challenge from big lenders.Massachusetts Dispute Resolution Services lists 239 local foreclosure mediation cases filed under the law since April, according to information provided by the city Law Department, with 77 cases closed for various reasons.Dispute Resolution?s report detailing the law?s track record for its first six months of existence lists 21 processed loan modifications; nine cases resolved with the homeowner “caught up with payments” and three cases where homeowners sold property or took other steps to avoid foreclosure.?We?ve had numerous situations where bank representatives and homeowners have resolved cases,” city attorney James Lamanna said.Another 40 cases were closed with banks receiving certificates of compliance allowing them to file a foreclosure deed with the Southern Essex Registry of Deeds in Salem. The report does not detail reasons why the cases were closed but Lamanna offered one explanation.?We?ve had homeowners tell MDRS, ?I?m over my head,?” Lamanna said.City attorneys are including Dispute Resolution?s case information in their legal defense against efforts by seven banks to strike down the mediation ordinance in federal court.Approved in 2013, the city?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.Bank attorneys branded the ordinance unconstitutional in July and they want a federal judge in Worcester to stop city attorneys and Dispute Resolution from processing mediations until arguments for and against the law get a full court review.Court action against Lynn overlaps with similar cases brought by banks against mediation ordinances passed by Worcester and Springfield officials.?We?ll probably get a court date sooner than later,” said Lamanna.He said statistics on mediation cases handled by Boston-based Dispute Resolution show that homeowners are seeking to resolve mortgage payment problems with banks and that small banks, in particular, are working with homeowners.?Of the smaller, locally based lenders, compliance has been prompt and responsive,” Dispute Resolution stated.Community Credit Union, Brotherhood Credit Union and Equitable are among small, local banks listed in the report along with Salem Five. Compliance by big national lenders “has been slow,” according to the report, partly because the banks have to set up procedures to “efficiently comply with the Lynn ordinance.”Mediation results tallied up by Dispute Resolution since April also include:u 67 homeowners have reached out for mortgage mediation.u 19 cases are scheduled for mediation or conference calls.u 28 conference calls aimed at resolving mortgage problems are scheduled by Dispute Resolution.?We estimate that cases take between two to four conference calls to navigate information and discuss issues before either achieving settlement or progressing to an in-person mediation session,” the report stated.Thor Jourgensen may be reached at [email protected].