Although the City Council of Lynn, Massachusetts approved a foreclosure mediation program to help distressed homeowners within the area, Lynn’s Mayor, Judith Flanagan Kennedy, has stated that the city’s budget has no room to pay for the program. "I cannot afford a mediator—the council can find money out of their budget," she stated in a press conference this week.
Although Mayor Kennedy had vetoed the foreclosure mediation program on April 26th, the City Council passed an 11-0 vote to override her veto this week, and received an overwhelming response from local foreclosure mediation supporters after doing so.
According to Kennedy’s letter to the council last month, she did not believe that the government of a municipality had a right to step into the middle of contracts that are legally binding. For this reason, she vetoed the foreclosure mediation plan, which would require that representatives of loan holders, banks and mortgage companies meet with homeowners facing the threat of foreclosure to discuss possible modifications to the loan before the foreclosure commenced.
According to the legislation, a loan holder would have to complete the mediation process with the homeowners before filing paperwork for a foreclosure with the Southern Essex Registry of Deeds in Lynn. The law would become applicable in June, while the city’s budget proposal is due on May 24. According to Mayor Kennedy, a 3.5 percent cut in spending city-wide is required if the city is to pay for the foreclosure mediation program. "If the council can find the money (for a mediator),” says Kennedy, “I have no objection.”
The Mayor has also been vocal about her expectation that banks and loan holders will attempt to seek legal action against the city’s policy if the new ordinance sticks.