2 min read
Posted on 09.12.12
  • 2 min read
  • Posted on 09.12.12

From the home office:

Mayor Francis Slay announced today that he will seek legislation to establish a mediation program for homeowners facing foreclosure. Similar legislation championed by a coalition of pro-consumer groups recently passed the St. Louis County Council.

Foreclosures can hurt neighborhoods by lowering property values, increasing crime, and increasing blight. They can also cost the taxpayers who are forced to foot the bill for more police protection and maintaining problem properties.

"Keeping people in their own homes is good for everyone," Slay said. "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 legislation was drafted by a group of non-profit agencies that have been working with the City and St. Louis County to help keep as many people in their homes as possible. "This legislation won't help everyone facing foreclosure," said Chris Krehmeyer, President and CEO of Beyond Housing. "But, for those who can stay in their own homes, it will be a lifesaver."

Under the legislation, lending institutions would be required to pay for mediation if the homeowner requests it. The mediator would be a neutral facilitator, with no power to order anything. The goal would be to find a way to keep the borrower in his or her home in a way that is acceptable to the lender.

If the homeowner requests mediation, and the lender participates in good faith and the foreclosure still cannot be avoided, the foreclosure will go forward. If the lender does not participate in good faith, the foreclosure can still go forward, but the lender will face a $500 fine. The whole process is designed to be completed within 60 days.

Mayor Slay has asked Alderman Fred Wessels, the chairman of the Housing and Urban Development Committee, to sponsor the legislation. The foreclosure prevention coalition is working with the City to improve the legislation. Alderman Wessels is expected to introduce it in the next few weeks.

"This is a common sense step forward," Wessels said. "It will only help homeowners who have a way to catch up and keep up with their payments. But, it might prevent unnecessary foreclosures."

Twenty five states have some form of foreclosure mediation. Typically, fewer than 20% of homeowners choose to go through mediation.