ST. LOUIS (KMOV.com) —The St. Louis Board of Alderman passed a bill which Mayor Francis Slay signed into law Wednesday establishing a new ordinance requiring lenders to offer mediation for homeowners facing foreclosure.
According to the Mayor’s Office, the new ordinance addresses the communication breakdown between homeowners and lenders by asking the lender to meet with the homeowner to review loan difficulties, discuss possible modifications and explore federal housing resources prior to completing an owner-occupied, residential foreclosure.
In the last calendar year, 1,116 St. Louis city homeowners went through a foreclosure.
“Home foreclosures present dangers to the health, safety and welfare of the public, thereby creating a public nuisance. They hurt property values and interfere with the collection of real property taxes. It’s a serious concern, which municipal government cannot ignore,” Mayor Francis Slay said.
The City’s ordinance mirrors that of St. Louis County.
Mediation is at no cost to the City or to City taxpayers. Lenders issuing the foreclosure will have to send a “notice of mediation” to the homeowner and mediator, plus pay a $100 filing fee.
The mediator, United States Arbitration & Mediation Midwest Inc., will then attempt to reach the homeowner three times over 15 days. If the homeowner wants to participate in the mediation, the mediator schedules a meeting with the lender, at which time the lender pays an additional $350 to the mediator for the service. If the lender and homeowner come to an agreement during mediation, the homeowner stays in his/her home. If not, the lender is free to move to foreclosure.
The Federal Reserve Bank of Boston studied the effects of the foreclosure mediation in New England, and of 10,000 homeowners in the program, 80% avoided foreclosure.
All forms for lenders are available on the City’s website as well as that of United States Arbitration & Mediation Midwest Inc.