Slay backs foreclosure mediation program for St. Louis
This article first appeared in the St. Louis Beacon, Sept. 13, 2012 - The city of St. Louis could be the next jurisdiction to implement a foreclosure mediation program, an initiative aimed at helping distressed homeowners.
St. Louis Mayor Francis Slay said in a news release he was throwing his support behind legislation in the Board of Aldermen establishing a mediation process, which involves a homeowner, lender and servicer meeting with a neutral third party.
The proposed bill – which would prompt lending institution to pay for the mediation – would call for penalties if lenders don’t participate “in good faith.” While advocates of mediation note that the process won’t automatically stop a foreclosure from going forward, they add that it can catch mistakes and potentially figure out an amenable solution to keep somebody in their home.
“Keeping people in their own homes is good for everyone," Slay said in the statement. "It is good for our families. It is very good for our neighborhoods. And, if the borrower can make good on his or her obligation, it is good for the lender.”
The St. Louis County Council voted earlier this summer to implement a similar program by a 5-2 margin. St. Louis County Executive Charlie Dooley signed it into law.
Critics of the proposal -- including representatives from the Missouri Bankers Association, the St. Louis Association of Realtors and the Missouri Mortgage Banking Association – argued that placing additional regulations on lenders would harm.
Others have questioned whether St. Louis County can legally enact its ordinance, noting among other things that the state legislature has authority over banking regulations.
The release added that Alderman Fred Wessels, D-13th Ward, would sponsor the measure through the Board of Alderman. Wessels – who is also the chairman of the Housing and Urban Development Committee – recently ran unsuccessfully for city treasurer.