Banks try to block foreclosure regs; Worcester ordinance enacted this year.

Byline: Nick Kotsopoulos

WORCESTER -- Six Central Massachusetts banks are among seven in the state asking a federal court to block foreclosure ordinances enacted earlier this year by city councils in Worcester and Lynn.

The seven banks joined forces here Monday in filing a motion in U.S. District Court, seeking a preliminary injunction to prevent the two cities from implementing the ordinances until the fate of a similar ordinance in Springfield can been decided by the court system.

The six area banks that are plaintiffs in the suit are: Hometown Bank, Country Bank for Savings, Avidia Bank, North Brookfield Savings Bank, Rollstone Bank & Trust and Southbridge Savings Bank.

The seventh bank is Boston-based Eastern Bank.

Jon Skarin, senior vice president at the Massachusetts Bankers Association, said Tuesday the court action seeks to temporarily block both cities' recently approved foreclosure mediation ordinance and ordinances that require lenders to post a $5,000 bond with Worcester, or a $10,000 bond with Lynn, when lenders initiate foreclosure proceedings.

The purpose of the bond is to give the city the financial wherewithal to maintain properties that fall into disrepair.

Mr. Skarin said banking industry officials had been in communication with city officials in both Worcester and Lynn during the past two months, asking them to hold off on implementing their foreclosure ordinances until a determination is made on the Springfield ordinance.

He said when it appeared that both cities were going to go ahead and implement the ordinances, the banks decided to file suit.

"It was felt this was the only way to get their attention,'' Mr. Skarin said in a telephone interview. "It was an action of last resort because the banks were hoping these cities would voluntarily put this aside for the time being, but it was clear that wasn't going to happen.''

City Manager Edward M. Augustus Jr. said Tuesday the city had not yet been served with the legal papers and he could not comment on the particulars of the suit. But he added the suit was not unexpected.

"We knew, based on what happened in Springfield, we could be facing a challenge on this ordinance,'' Mr. Augustus said. "But faced by the heartbreaking problems surrounding foreclosure confronting residents of Worcester and so many other cities, the City Council felt it was necessary to act.''

Mayor Joseph M. Petty, meanwhile, said while the foreclosure problem may have left the headlines, it has not...