Former BankRI CEO Lands $300/Hour Gig Mediating Foreclosures
Friday, January 06, 2012
Former BankRI President and Chief Executive Officer Merrill Sherman will earn $300 per hour to negotiate foreclosure settlements between property owners and banks, according to court filings.
Sherman, who was said to be weighing a run for Congress but later opted to stay out of the race, was appointed to be a Special Master by Judge John J. McConnell Jr. in order to assist with pretrial matters and negotiate foreclosure settlements.
As Special Master, Sherman will have several responsibilities, ranging from the ability to require both parties to meet face-to-face and to make formal and informal recommendations to the court relating to settlement arrangements.
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McConnell made the decision to appoint Sherman as Special Master after hundreds of plaintiffs filed suit in Rhode Island against MERS Inc. and other financial institutions, claiming the groups were responsible or “fraudulent” mortgage foreclosures.
According to numbers released by CoreLogic this week, the foreclosure rate in the Providence-Fall River-New Bedford region increased by .2 percentages points between October 2010 and October 2011. In December, the National Association of Real Estate Editors reported that More than 500 homes entered the foreclosure process during the month, a rate of 1.18 per 1,000 housing units.
In his court order, McConnell noted that a significant downturn in the economy has forced property values to plummet and has placed many properties “under water.”
“The situation is problematic for both sides,” McConnell said. “Plaintiff homeowners are confronted with the emotional and economic devastation of losing their homes to foreclosure. Defendant financial institutions are confronted with countless mortgages so now which homeowners have stopped paying.”
A Win for Homeowners
Sherman recently closed on the sale of BankRI, which was purchased in April for $234 million by Boston-based Brookline Bancorp. Prior to joining the financial sector, she was a lawyer at Hinckley, Allen & Snyder in Providence. She is also the former Chairwoman at Crossroads Rhode Island.
In addition to receiving $300 per hour, McConnell noted that Sherman will be reimbursed for “reasonable expenses,” including any “secretarial, clerical, paralegal, information technology and general office or other professional fees and expenses.”
Corey Allard, who represents foreclosure victims, called the Sherman appointment a victory for homeowners.
“It’s a win for homeowners because it forces the banks to come to the table because right now what happens now is the banks hold all the card,” he said. “Now there’s a mediator involves, he’s essentially forcing the banks to come to the table.”
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