Big Banks challenge Judge McConnell’s settlement program in First Circuit Court
On Feb 5, 2013, Attorney Corey Allard will be presenting oral arguments in front of the United States Court of Appeals for the First Circuit, which will ask the court to uphold the settlement program created by Judge John McConnell. This program gives homeowners the ability to have leverage when negotiating with the Banks.
The appeal in case Re: Mortgage Foreclosure, No. 12-1526 will be heard by Chief Judge, Hon. Sandra L. Lynch and a three-judge panel from the U.S. Court of Appeal’s Frist Circuit. “Our office has and will continue to stand firmly behind Judge McConnell and the settlement program” said Attorney Allard.
The settlement program dates back to Jan 5, 2012 when Judge McConnell appointed Merrill Sherman as special master over a docket of cases consolidated as In re Mortgage Foreclosure Cases, Misc. No. 11-mc-00088-M-LDA. The task of the Special Master was to “explore all possibilities for the potential settlement of these claims.” Throughout the last year the settlement program has proven to be both successful and beneficial to Rhode Island homeowners. This past Fall, a report on the settlement program concluded that “Of the 131 settlement conferences Sherman held between Aug. 7 and Sept. 13, the report said, 81 led to requests for loan modifications and 33 led to ‘‘cash for keys’’ negotiations, a program in which homeowners are effectively offered money to leave. Nine cases have been resolved, and one dismissed.”
The Law Offices of George E. Babcock works daily on over 550 cases that are part of the settlement program. “If the Banks ask the First Circuit Court to scrap Judge McConnell’s settlement program thousands of Rhode Islanders will be left without bargaining power against the banks. As it currently stands, Judge McConnell’s program forces the Banks to deal with the homeowners and adds leverage to the playing field. “ said Allard. Below is an overview of the oral arguments that will be presented to the court on February 5th 2013.
The central issue being argued in, In Re: Mortgage Foreclosure is whether the District Court Amended Order issued by Judge McConnell should be upheld. This order consolidated the Mortgage Foreclosure docket, and appointed a Special Master to oversee mandatory mediation of the cases that make up the Federal District Foreclosure docket. During the mediation period the order makes clear that all foreclosure and eviction proceedings shall be stayed, pending a final order and decision from the court.
The stay allows for the Special Master to effectively conduct mediation meetings with both parties; the Bank enacting the foreclosure, and the people being foreclosed on. The purpose of these mediations is two-fold. The first prong of the mediation is, allowing people to have an option of staying in their homes with a mortgage that they can afford, or to move on with a cash settlement that will compensate them for their loss. The second prong of the mediation is that it will cause these current non-performing loans to return to performing assets for the mortgagee loan holders.
The order does this by staying foreclosure proceeding and forcing mediation so that a discussion can take place and for an agreement of a loan modification or settlement can develop. Ultimately, establishing a settlement and or keeping people in their homes, is the goal of the Law Office of George E. Babcock.
A second but equally important aspect of the argument in this case is that each case is not merely a case about legal issues but about an individual’s right to defend title to their home. It is important to put the face of a real life person before the court facing the very real life issue of losing a home.
The case on appeal is really an appeal of the Federal District Court order issued by Judge McConnell. As mentioned this order created a docket and mediation program, governed by a Special Master. Babcock Law Offices represents the vast majority of the plaintiffs in these cases. The appeal came to the first circuit by way of the Defendants bringing suit against Judge McConnell for the issuance of his order that created the docket and mediation program. As Babcock Law Offices represents over 550 plaintiffs on the Federal Docket, they are handling the appeal of the order as well.
The Massachusetts First Circuit Court of Appeals is located at the John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Boston, MA 02210. Allard will present his argument starting at 9 am. Check back for a decision in the case. Click here to readRe: Mortgage Foreclosure No. 12-1526 appeal.