The Massachusetts Department of Environmental Protection has assessed
a $4,000 penalty to the Southbridge Savings Bank for failing to notify the
agency within 72 hours about a leak from a home heating oil tank.
After foreclosing on the property, the bank discovered the oil tank in the
basement had been leaking onto the dirt floor for a period of time. The bank
retained a consultant to remove contaminated soil and install monitoring
wells since the tank was within 500 feet of a drinking water well.
The fine was minimal but the bank could have discovered the leak if it had done
diligence PRIOR to foreclosure. Moreover, if the tank has indeed impacted the
groundwater, the bank could now find itself in the cross-hairs of the DEP. Had
the sampling been done before foreclosure, the bank could have made a better
risk informed decision whether the potential cleanup costs exceeded the value
of the defaulted loan.
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