Foreclosure mediation requirement to continue

The Boyd Law Group sought a temporary restraining order again St. Louis County’s foreclosure mediation program alleging that it causes irreparable harm if the program is allowed to continue. The Judge seemed skeptical of this allegation and therefore declined to issue the temporary restraining order. In fact, the Judge stated, “I am wondering where the irreparable harm is.” Michael Boyd, of The Boyd Law Group stated that the irreparable harm comes in with a fine of $1,000 for non-compliance.

The ordinance in which The TRO was related was approved by the St. Louis County Council in August. The ordinance establishes a foreclosure mediation process for homeowners. The measure allows homeowners in the county to meet face-to-face with their lender to try to work out a settlement. The ordinance does not require that an agreement be mad, merely that they meet to attempt to work something out. Lenders are required to pay the costs of the mediation. The fine for failure to comply with the ordinance can be up to $1,000.

The Boyd Law Group was not alone in their efforts to prevent the ordinance from going into effect. The Missouri Bankers Association and Jonesburg State Bank tried to stop the ordinance by filing suit against the county in state court a few months ago. Their suit alleged that the ordinance establishing foreclosure mediation violated a number of statutory and constitutional provisions in Missouri. The St. Louis County Associate Circuit Judge upheld the ordinance stating that it does not violate statutory or constitutional provisions. The Missouri Bankers Association is appealing the decision. Boyd distinguishes his case stating that he filed his suit against the county in federal court because he is raising different issues than those raised by the Missouri Bankers Association.

Mediation required prior to a foreclosure sale can be a major benefit to the homeowner while causing little to no damage to the lender and in fact can be of some benefit to the lender if a resolution is reached during mediation. Often the homeowner simple does not know what their options are and who to contact. Trying to get through to the right person at a big mortgage company has proven to be rather difficult. By requiring a foreclosure mediation process, it gives the homeowner a chance to work something out with the lender. It also requires the lender to give answers and possible solutions rather than informing the homeowner that they should hear from someone in 7-10 business days.