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Mediation Saves Mediation in Massachusetts

Jennifer Shack, March 14th, 2013

In an appellate mediation over the fate of a mediation program, two sides have agreed to preserve mediation. Back in 2011, Springfield, MA, passed two ordinances to deal with the foreclosure problem in the city. The first instituted a mediation program. The second required lenders to post a $10,000 bond for any foreclosures filed for vacant properties. Lenders filed suit in U.S. District Court, where the judge affirmed Springfield’s right to mandate both the bond and mediation. You can read about the rationale for both the suit and the court’s decision here. The lenders appealed and the two sides voluntarily entered mediation.

As a result of the mediation, the lenders are ready to drop their appeal if the city amends the ordinance so that lenders don’t have to post the bond if they register the property within 21 days, pay a $100 administrative fee and identify a local property manager and agent. Interestingly, the mediation ordinance will be left as is, including a $300 a day fine if the lender doesn’t comply with the ordinance.

So, at a time when lenders are working to keep mediation from becoming law in Missouri and Oregon, lenders in Massachusetts have voluntarily dropped their opposition to a mandatory program  – and they did so through appellate mediation.

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