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Worcester Considering Mandatory Foreclosure Mediation Program

Wednesday, April, 10, 2013


 

The City Manager of Worcester, Massachusetts, Michael V. O’Brien, will be meeting with advocates of a program that is designed to assist financially distressed homeowners potentially keep their homes despite threats of foreclosure.   The meeting is scheduled in an attempt to change O’Brien’s mind concerning the program, since he has already informed the City Council that he can’t recommend mandatory mediation at this time due to the problems such a program would place on the already-tight city budget. 


However, despite his hesitance to require the program in the city, he requested that council members endorse statewide legislation that would place the burden implementing the program on the state.  Such legislation would also address how budget concerns would be handled, which is the top concern of city officials considering the program. 


Grace Ross, a mandatory mediation program advocate who is with the Worcester Anti-Foreclosure Team, argues that passing such legislation could require up to two years.  According to Ross, this is a time period that will result in a lot of people losing their homes and those Massachusetts homeowners cannot wait that long.  Citing numbers as examples, Ross stated that since the idea was originally brought up in a City Council meeting last year, 403 Worcester households have dealt with losing their homes to foreclosure. 


“We can't afford to wait; 403 households missed the opportunity to participate in mediation,” said Ross.  “This is something of great urgency.  The number of households that would benefit from this is significant.”


Mandatory Foreclosure Mediation programs have been highly successful in other states, requiring lenders to work with homeowners in mediation before completing the foreclosure process.  Such programs are usually placed at the expense of the lender and are compulsory if a lender intends to foreclose on a property.  Failing to comply with the ordinance would result in a $300 per day fine placed on the lender