A group of banks had sought relief from a $10,000 bond requirement for each foreclosed property in Springfield.
SPRINGFIELD – The City Council voted Monday to uphold two anti-foreclosure ordinances approved in 2011 rather than accept a negotiated settlement of a lawsuit filed by a group of banks who claimed they should not have to post a $10,000 bond on vacant, foreclosed properties.
The group of banks, in the proposed mediated settlement, had offered to drop the suit and appeal if the bond requirement was removed. Under one ordinance, banks were required to post the bond that could be spent by the city if needed to clean up and maintain the sites if the banks failed to maintain them.
At Monday’s meeting, councilors and some community activists said the $10,000 bond was a critical piece of the legislation as a tool to prod banks to keep foreclosed properties from becoming a blight on the community. Activists said that ordinance, and an ordinance that calls for the establishment of a city-approved, mandatory mediation program to assist homeowners faced with foreclosure are models for communities across the country.
Amaad Rivera
“I’m pretty excited the City Council reinforced the historic ordinances that are setting precedents around the country,” said Amaad I. Rivera, a former councilor who sponsored the ordinances, and a community activist. “The city now needs to focus on implementation. The $10,000 is an incentive and a deterrent.”
Councilors said they want the city to start taking the steps to implement the anti-foreclosure program by enforcing the ordinances. The banks have argued that the city overstepped its legal authority and that many provisions are vague or in conflict with state law.
The banks had initially filed suit in U.S. District Court, but Judge Michael A. Ponsor upheld the legality of the ordinances last year. The banks then appealed to the U.S. First Circuit Court of Appeals in Boston, which was followed by mediation.
Under the proposed settlement, the banks would not have to post the bond if they: register a newly vacant property with the city within a 21 day period; pay a $100 administrative fee to the city; identify a local agent within 20 miles of City Hall that can be served legal notices by the city; and if vacant, identify a local property manager. The council voted unanimously not to accept the offer.
Councilors Melvin Edwards and John Lysak said the banks would only lose the money if they fail to properly maintain their foreclosed properties. While several area banks had filed suit, it is the larger national banks that own the vast majority of the foreclosed properties in Springfield, they said.
Associate City Solicitor Lisa C. DeSousa said the banks can now proceed with the appeal in federal court, but the city does have the power to start implementing the anti-foreclosure programs. The city will need to provide some upfront funds to start the program, but can charge administrative fees, she said.
Candejah Pink, who continues to live in her home that was foreclosed in 2010, praised the councilors for upholding a “monumental foreclosure ordinance.” David Dunwell, still living in a house foreclosed in 2009, said he is proud the council for standing by the ordinance.
The plaintiffs are listed as United Bank, Hampden Bank, Chicopee Savings Bank, County Bank for Savings, Easthampton Savings Bank and Monson Savings Bank.
In other action, the council voted to approve a $32 million expansion project at Central High School that includes building a science lab addition, renovating existing science labs, and installing a new roof for the entire school and a sprinkler system. The project is approved for up to 80 percent state reimbursement of costs.