Tag Archives: City Councilor at Large candidate

Reposting InCity Times articles on foreclosure mediation programs. (Why Worcester needs one!)

By Michael Gaffney, Worcester City Councilor at Large candidate

As you are aware, the issue of foreclosure mediation has been debated by the Worcester City Council for several months with plenty of discussion, but no action.  Growing frustrated with the lack of action, I wrote to the most vocal council member on the topic as follows.  I did not seek to attach myself to the issue for political advantage; rather, I handed out a solution and would have been satisfied if any action were taken to achieve a result.  Clearly, if any action had been taken, I would not be writing.  I will let the email chain speak for itself:

On Apr 2, 2013, at 9:16 PM, I wrote to an email from my phone titled “Foreclosure Mediation” to Councilor X:

Springfield Mass program seems to work…  Looks like a settlement just made to implement the plan:

http://blog.aboutrsi.org/2012/program-management/foreclosure-mediation-upheld-against-cons titutional-challenge/

RI has plans in Cranston, Providence and Warwick:

http://www.housingwire.com/news/2010/01/12/rhode-island-city-set-roll-out-foreclosure-medi ation-servicer-fines

So, it appears we have a format to follow.  Love the fine Springfield imposes against the banks for not attending.

The RI bankruptcy court also has a plan for mediation in Chapter 13 plans.

Michael

Sent from my Verizon Wireless 4G LTE Smartphone

Response from Councilor X:

Thanks.

Sent from my iPhone

Email sent to Councilor X on April 3, 2013

Councilor X:

I sent over some information to you last night relative to the foreclosure programs in other cities. Now that I am at a computer, I am able to forward more substantial information.  I have attended a number of conferences on the issue relative to the U.S. Bankruptcy Court’s program in Chapter 13 Plans that started in RI, so I have a bit of background.

Attached you will find the Springfield and Providence Ordinances.

Springfield uses a neutral not-for-cost mediation program. There are several options available. First, you could simply try the Worcester Bar Association to administer a program of volunteers (POC = Polly Tatum, President #508-795-1557.) Second, the Better Business Bureau currently administers the Lemon Law Arbitration Program under Massachusetts Law, the arbitrators get a “gratuity” of $100.00 per case (POC Nancy Cahalen, President #508-755-3340 x109.) Third, the District Court uses a mediation program formally administered by the WCAC now being administered by Mediation Services of North Central Mass (I do not have any contacts other than what is listed on the website – POC Elaine Sherrin, Director #978-466-9595.) Finally, the Massachusetts Justice Project currently runs the Lawyer for the Day Program and through  volunteers administers free legal services such as bankruptcy cases (I do handle free bankruptcy cases, but do not have a POC, the just send them over to me, the main number is #800-639-1209.)

I just don’t see where implementation of such a program would cost the city an inordinate amount of funds. Further, where we have language concerning ordinances in use, this matter shouldn’t continue to drag out in meeting after meeting. Finally, where the Federal District Court found the ordinance in Springfield to be constitutional and where the banks challenging it settled (and agreed to be bound) before the Appeals Court, passing such a measure is less likely to face a legal challenge or cost the city to defend it.

I am not trying to insert myself in this matter; rather, I been hearing the debate for several months and find it vexing that no progress has been made. This has been your issue; hence, I have communicated with you. If I can be of further assistance, let me know.

Thank you.

Michael Gaffney

On Apr 3, 2013, at 5:27 PM, I wrote:After review of the last paragraph of my last email, consulting with my wife and a friend, it appears I miscommunicated my thoughts.  I meant to say that the situation was not being resolved, that you were leading the charge on the issue and I was sending you information to help you out directly as this has been near and dear to you.Unfortunately, the way in which I communicated was as if you weren’t getting things done.  That is absolutely not what I intended.  I tend to focus on resolving an issue and am less careful about how I communicate.   Clearly I will need to improve my delivery.  I had hoped to help and instead I may have inadvertently insulted you.  It was not my intent. 

I hope you will accept my sincere apology.

Michael

Sent from my Verizon Wireless 4G LTE Smartphone

 

Response from Councilor X, April 3, 2013:

No problem. I appreciated you sending the info.

Sent from my iPhone

Article sent to the Editor, Worcester Telegram and Gazette, May 1, 2013 (unpublished, but plenty of specious and inane comments were published on May 3, 2013)

Dear Sir/Madam:

Your recent article titled “Big Banks win again” concerning the $5,000.00 foreclosure bond ordinance showed the short falls in the current bond requirement.  We need to fix the unintended consequences of the bond requirement and strengthen the ordinance to help our citizens in foreclosure.

The cities of Springfield and Providence have passed ordinances that require the mortgage holder to mediate with the homeowner prior to foreclosure.  Springfield’s ordinance was upheld in Federal District Court and was settled on Appeal.  All the tools we need to update our ordinance are available and can be easily implemented.  We need to rewrite the current ordinance to protect our citizens.  We can’t let another month pass and another family be put out on the street without taking action.

Michael T. Gaffney

Worcester

Today is May 5, 2013.

*******************************

A mortgage mediation program for Worcester

Written by admin on August 21st, 2013

By Michael Gaffney, candidate for Worcester City Councilor at Large

Mortgage mediation is a process whereby during the foreclosure process, a representative from the bank meets with the homeowner relative to a mortgage workout. Getting two parties to sit down in a neutral environment to discuss the issues often yields positive results. A property lost to foreclosure lowers surrounding property values and seriously disrupts neighborhoods.

On August 19, 2013, per the Telegram and Gazette, the administration of the City of Worcester reported that it would not back an ordinance to establish a mediation program on property entering into foreclosure.
The reasons given for not implementing such a program were costs, logistics and legality:

As to costs, there are far too many volunteer organization as well as services operating under a block grant that provide free services to our courts and other programs. There are also numerous low cost providers. Cost is simply not a viable argument.
Logistically, the City of Worcester already requires a $5,000.00 bond for potential costs upon the filing of a foreclosure; therefore, someone is already assigned to review the bond and a tracking mechanism is already in place. The time involved in a referral to a mediation program is nominal.

As to the alleged legal issue, in the August 19, 2013 edition of the Telegram and Gazette, the City Solicitor claims that the Springfield ordinance is pending appeal which is mostly accurate. On July 2, 2012, U.S. District Judge Michael Ponsor dismissed the lawsuit filed by the banks against Springfield’s mediation ordinance stating “the modest effort made by the city to soften the crisis through the promulgation of the two ordinances violates no Constitutional provision or state statute.” An appeal was filed by the banks. On or about March 14, 2013, the banks offered to drop the appeal if the City of Springfield would drop the bond requirement. The cause of the appeal was not with the mediation ordinance; rather, the cause of the appeal is the posting of the bond.

Here, the City of Worcester has implemented the bond requirement but not the mediation ordinance. Take note, the City of Springfield’s bond requirement is $10,000.00 which appears more penal than remedial. The banks were willing to allow the mediation ordinance. It seems obvious that the Springfield City Council is more concerned about the bond money than solving the problem for the homeowners, unlike the City of Worcester.

Our City Council rose to the occasion last night to advise the administration that they will push forward and should. In response, the administration offered to come to the table and look at all options. Unfortunately, this means further delay in the enactment of any ordinance, but the parties appear willing to further the process. Hopefully action will be taken sooner rather than later.

 

Worcester needs a new approach to doing business with businesses!

By Michael Gaffney, candidate for Worcester City Councilor at Large

The City of Worcester needs a new approach to doing business and leaders with fresh ideas.

The City of Worcester is replete with empty commercial buildings and store fronts that are abandoned.  Commercial property owners now choose to demolish their buildings and turn them into parking lots or simply refuse to update their retail establishments.  Other than Worcester North, retail has largely left the City for nearby towns.

The commercial tax rate in the City of  is in excess of thirty percent (30%.)  Surrounding towns have a commercial tax rate of around seventeen percent (17%.)  It is clear why businesses have left and others choose not to open in the City.

The ideas to resolve the lack of commercial business in the City of Worcester have been limited to massive central planning projects such as the Theater District (to which citizen input was ignored) or the time-worn notion that the City of Worcester just needs to promote itself better.  For decades the City of Worcester’s politicians have chased the latest gimmick that will “revitalize” the City.  Past costly projects that would “save” the City have included the Worcester Common Fashion Outlets, the forgotten Arts District project and the Union Station project that is now a multi-million dollar banquet facility with an underutilized parking garage.

Where we currently have over a billion dollars in unfunded pension and pension health liabilities, another billion dollars in EPA requirements to benefit the Narragansett Bay clean up (for those that can afford to live in Newport and Jamestown) and are understaffed in our police department, fire department, and other services we simply cannot cut commercial tax rates.  Our residential tax rate is nineteen percent (19%) while surrounding towns are around seventeen percent (17%.)  The continued increase in residential taxes will result in residents leaving the City as well.

My plan is to focus on growing our tax base and taking a fresh approach to combatting our challenges with commercial growth. Currently, the City immediately increases the assessed value of commercial property as soon as the owner improves it.  The owner has to pay increased taxes as well as additional costs to pay off whatever loan they needed to make the improvements in the hopes of attracting tenants.  This is a disincentive and a significant driver of the increasing number of buildings in poor condition and abandoned. With the current commercial tax rate, there is little incentive for investment in existing commercial property and inhibits commercial growth in the City.

My plan would give commercial real estate holders an incentive to reinvest in the commercial property by fixing their taxes to the base (current) year for a period of time commensurate with the investment.  For example, a commercial real estate holder invests $5 million in a building to improve it for tenants; I would suggest setting the taxable income on the property before improvements for a period of years to justify the return on investment.  This will help to improve the building, employ workers to improve the building and bring in commercial tenants  to the City of Worcester.

My plan would provide an incentive for owners to improve their buildings, but would also spur commercial growth while not lowering the City’s commercial tax revenue as it would remain the same, and then grow significantly in just a few short years.  Right now, the City of Worcester’s commercial base is retracting and being bought up by non-taxpaying non-profits.  This trend must be reversed or the City will not be able to maintain its debt obligations or services.

As commercial tenants come to the City, they employ workers, buy local goods, and create demand for more commercial real estate that then brings more tax revenue.  Further, by creating jobs, people have a place to work and earn money, often leading them to purchase homes and pay taxes.  They will frequent local businesses while living here.  Finally, we may actually keep some of our transient college students in the City when we can offer them post-graduation employment.

Let’s take a new approach and bring fresh ideas to grow the City of Worcester and benefit our residents.