Lenders in St. Louis County will soon be required to offer mediation to homeowners on the edge of foreclosure.
Councilwoman Hazel Erby, who introduced the new plan, told council members something had to be done to help slow the rate of foreclosures in the county.
“On behalf of the many families who contacted me over the last year and shared their difficult stories about losing their homes,” Erby Said. “I hope they know that this ordinance is in their honor.”
Lenders, on the other hand, say the county is overreaching its constitutional limits in the state of Missouri.
Vice President of the Missouri Bankers Association, Craig Overfelt, said after the meeting that a lawsuit over the ordinance is likely.
“We believe firmly that it violates state law as regards to what local governments can do in the lending area and potentially even some constitution questions,” Overfelt said.
Overfelt added that the ordinance increases operating costs for lenders, and that in turn it will make it harder for banks to give homeowners loans.