Council rejects legal advice in foreclosure vote

LYNN – City councilors defied city attorneys’ warnings Tuesday, voting to scrap a local foreclosure mediation law except for a section allowing homeowners facing foreclosure to stay in their homes and pay rent.More than 80 people who filled the Council Chamber cheered and clapped following the vote, but Council President Daniel Cahill warned council action “will be eventually challenged” in court with banks suing the city for preserving the homeowner tenancy provision.”We could potentially spend hundreds of thousands of dollars. We’re not a rich city,” Cahill said.Under Section 14, homeowners facing foreclosure cannot be evicted and are required to pay rent to a bank until the foreclosure is completed and the property sold.”It gives them a fighting chance to stay in their home,” said community organizer Isaac Simon Hodes.The state Supreme Judicial Court last December dealt fatal blows to mediation laws in Lynn, Worcester and Springfield by ruling state foreclosure law supersedes local ordinances. Even mediation supporters acknowledged the significance of the court’s ruling, but they packed the Council Chamber to urge council support for the Lynn law’s “unnecessary vacancies” section.”This is one that would be worth the fight,” Ward 6 City Councilor Peter Capano told his colleagues.Passed by the council in 2013, the mediation law gave homeowners facing foreclosure the opportunity to sit down with bank representatives and hammer out financial agreements allowing them to stay in their homes.Banks objected to the ordinance, claiming local foreclosure laws make it difficult to do business from one community to the next.A mediation firm began holding bank-homeowner meetings last June but the high court decision prompted city lawyers to urge councilors to repeal the mediation law. City attorney James Lamanna repeated that warning Tuesday after Capano proposed retaining the unnecessary vacancies section.”It is the unanimous decision of the Law Department that if 14 survives, the city will be sued, it will be unsuccessful,” he said.But Harvard Legal Aid Bureau attorney Eloise Lawrence challenged Lamanna’s claim Tuesday and questioned the degree to which the city could face a lawsuit from banks by preserving homeowner tenancy language.Councilors prior to voting took the rare step of holding a 42-minute closed-door executive session with city lawyers and Lawrence to discuss the proposal. The Council voted 11-0 to scrap the mediation law with councilors, except Cahill, Darren Cyr and Wayne Lozzi, supporting Capano’s motion to preserve Section 14.In other action Tuesday, the council tabled a proposed site plan review ordinance providing review for development proposals. The vote to table followed a similar one by the Planning Board Tuesday night to delay action on the site plan proposal for two weeks.Lynn Business Partnership members raised concerns about the degree of authority the proposal gives housing, economic development and other local officials sitting on a proposed site plan review committee.”The purpose of site plan review is to get some local expertise,” said Partnership executive board member James Moore.City Inspectional Services Director Michael Donovan said Lynn with its densely populated neighborhoods needs site plan review while clearing the way for developers to move quicker on seeking approval for local projects.Site plan review is in place for the city’s waterfront and downtown. The proposed plan applies to Boston Street from Washington to Chestnut streets and Allerton and North Bend streets and part of Locust Street.