7 banks sue Lynn, Worcester over foreclosure rules

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WORCESTER, Mass. (AP) — Seven Massachusetts banks have filed a lawsuit alleging that the cities of Lynn and Worcester exceeded their authority in enacting foreclosure regulations in the aftermath of the housing bust.

The suit filed this week in U.S. District Court in Worcester says only the state can set rules governing foreclosure proceedings, and allowing communities to set their own rules can make for a confusing and conflicting patchwork across the state.

The suit seeks a preliminary injunction to prevent the cities from implementing their ordinances until the fate of a similar ordinance in Springfield can been decided in federal court.

Jon Skarin, senior vice president of the Massachusetts Bankers Association, said the banks felt they had no choice but to sue.

Officials in Lynn and Worcester say their ordinances help citizens avoid foreclosure.

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