(via Flickr/taberandrew)

The Missouri Bankers Association has filed a lawsuit against St. Louis County over a new ordinance that requires lenders to offer mediation to homeowners facing foreclosure.

The trade group’s president, Max Cook, said they plan to argue that it has a laundry list of legal problems. 

“Not the least of which is statute that says when it comes to banking laws, and rules, and regulation, no entity, be it a county, a city, what have you, can pass an ordinance or a rule more restrictive than that of the state of Missouri,” Cook said.

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A new ordinance could offer struggling St. Louis City homeowners an option to help avoid foreclosure.

The program would extend a loan mediation process to any homeowner who requests it from their bank, just like the one passed two weeks ago in St. Louis County. Ignoring this request would cost a lender a $500 fine.

But, banks claim the laws violate state statutes prohibiting government intervention into the foreclosure process.  They say it would mean fewer loans and increased costs.

St. Louis Mayor Francis Slay disagrees.

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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.”

For the second week in a row, residents lined up to tell councilmembers that mandatory mediation would help save homeowners facing foreclosure.

But Councilwoman Hazel Erby, who sponsored the bill, moved to table its final passage at least until next week.

“We’re looking over some things,” Erby said.  “We just received some letters, so, we’re taking those into consideration.”

When asked, Erby didn’t specify what additional information needed to be considered.

The St. Louis County Council moved forward tonight with a bill that would require lenders to offer mediation for homeowners on the edge of foreclosure.

During a public meeting on the plan, many community members told the council that mediation may have saved them from foreclosure.

For Councilwoman Kathleen Kelly Burkett, it was personal.   She was on the edge of tears when she told the story of foreclosing on her mother’s house.  

Councilwoman Hazel Erby, who originally introduced the bill, said they have to take action now.  

Saying it wants "to protect homeowners from surprises and costly mistakes by their mortgage servicers," the Consumer Financial Protection Bureau today proposed new rules it believes would make the home loan process simpler and give struggling homeowners more of a chance to avoid foreclosures.

(via Flickr/Indofunk Satish)

St. Louis alderman killed in car crash

Members of the St. Louis Board of Alderman are mourning the loss of a colleague this morning. The Missouri Highway Patrol has confirmed that 54-year-old Gregory Carter, Alderman of the 27th ward has died in an early morning crash on eastbound 370 in St. Charles County.

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A bill introduced at the St. Louis County Council meeting last night would require lenders give homeowners a chance to go into mediation before foreclosure.

On the surface the bill is straightforward, but the details of the process could take months to iron out. 

Nevertheless, Councilwoman Hazel Erby said as the foreclosure crisis lingers she felt compelled to ask for the bill’s introduction.

(Joseph Leahy/St. Louis Public Radio)

Troubled Missouri home owners can expect a degree of relief from a national mortgage settlement that has been reached with five of the nation’s largest mortgage lenders.

The Show-Me State is being awarded more than $196 million of a $25 billion settlement with banks -- including Bank of America and JP Morgan Chase -- over allegations of lending abuses and improper foreclosure procedures.

Missouri Attorney General Chris Koster says the settlement does not close the door on possible criminal charges against mortgage lenders.

(via Flickr/taberandrew)

Illinois home foreclosure activity rose 4 percent in June compared to the previous month, but was down 25 percent from one year earlier.

A report released Thursday by Irvine, Calif.-based RealtyTrac shows Illinois with 6,541 homes receiving initial foreclosure filings last month.

Another 1,944 properties were scheduled for auction sale and 2,529 properties were repossessed by banks.

Looking at the first six months of the year, Illinois foreclosure activity fell 29 percent compared to the same period last year.