This article first appeared in the St. Louis Beacon: St. Louis County Executive Charlie Dooley told reporters that he will do what it takes to stop state legislation to nullify the county’s foreclosure mediation ordinance.
“I think it’s a bad decision. I think St. Louis County is doing what’s in the best interest of St. Louis County,” Dooley said. “I’m always going to find myself doing what is the best interest of St. Louis County. This council indicated they wanted this bill for mediation for its constituency, which was hurt severely in the foreclosure debacle. And that’s where I stand.
“There’s a lot of things can be done,” he added. “It’s not over until it’s over.”
The bill to which Dooley referred easily passed the Missouri House last week by a 130-24 margin. It has yet to be assigned to a state Senate committee.
Sponsored by state Rep. Stanley Cox, R-Sedalia, and House Majority Leader John Diehl, R-Town and Country, the bill specifies that the “enforcement and servicing of real estate loans secured by mortgage or deed of trust or other security instrument shall be pursuant only to state and federal law.” It also says that no local law or ordinance “may add to, change, delay enforcement, or interfere with, any loan agreement, security instrument, mortgage or deed of trust.”
In effect, the bill’s language would strike down ordinances in St. Louis County and St. Louis. Both ordinances are effectively frozen while lawsuits wind through the courts.
The ordinances would allow a homeowner in foreclosure to enter into mediation with the lender and a neutral third party. Besides requiring lenders to pay for mediation, St. Louis County’s ordinance would set a $1,000 fine for a “person, firm or corporation convicted of violating any provision.” Most of the provisions in the city and county’s ordinances are similar, although the city’s measure enacts a $500 fine for non-compliance.
While advocates of mediation note that the process doesn't automatically stop a foreclosure, they say that it can catch mistakes and may keep people in their homes. Dooley noted that a number of county residents used mediation before the courts froze the program.
But critics, including the Missouri Bankers Association, have argued that more regulations on lenders would lead to unintended consequences in the region’s housing market. Cox told the Beacon last week that "that to have 115 or more local ordinances might in fact hurt the consumer."
Despite the House vote, Dooley said plenty of options are on the table. Some Democratic senators may filibuster the bill. Or Gov. Jay Nixon could veto the measure, although the legislation passed by a big enough margin in the House to override an objection.
Dooley added that he would be willing to go to Jefferson City to fight against Cox and Diehl's bill.
“We’re going to do whatever we can to support those individuals,” Dooley said after Tuesday’s council meeting, referring to residents experiencing foreclosure.
“Again, we still got the court battle involved in this issue. We’re going to contact the Senate to see where they stand. You’ve still got the governor. So the governor could still veto this thing.
“This bill started in St. Louis County,” he added. “We’re proud of this bill. It spoke to justice.”
Dooley also floated the possibility of the county suing if Cox and Diehl’s bill gets signed into law. St. Louis County Counselor Pat Redington told reporters that if Nixon signs the bill, the county would “have to look at that, see the source of their authority and see what our authority is.”
“As I said, we have to see what legislation gets passed. We’ll sit down and look at it,” Redington said. “And anything is a possibility. We’ll consider everything and do what’s best for county residents.”
She called the intent behind the bill -- nullifying local foreclosure mediation ordinances -- “very sad.”
“There are so many people who can use this and the program seemed to be getting some good things done until it was stopped in the appellate court pending an appeal,” Redington said. “It’s hard for us to understand why the legislature wants to line up with the banks and not protect the homeowners who are maybe having a hard time maybe getting a hold of their lenders or might be able to get the loan restructured in a way that will make it work better for everyone.”
