March 11, 2013
by Kip Bilderback
Millsap & Singer, P.C. – USFN Member (Missouri)
Earlier in February, the Board of Alderman for the City of St. Louis passed Bill Number 160CS pertaining to mediation of foreclosure for the City of St. Louis, Missouri. The mayor signed the Board Bill on February 27, 2013, creating St. Louis City Ordinance Number 69428. The ordinance is similar to that previously passed in St. Louis County, and details of the ordinance are listed below (with reference to Board Bill provisions, as the ordinance has not yet been published by the City of St. Louis).
As with the ordinance passed in the County of St. Louis, the city ordinance has been subject to a lawsuit. On Tuesday, March 5, 2013, the Circuit Court of City of St. Louis, in Cause Number 1322-cc00511, entered a Temporary Restraining Order “enjoining the City of St. Louis, Missouri, its agents, servants, employees and attorneys and those in active concert or participation, as well as Francis G. Slay, in his Official capacity as Mayor, from enforcing the provisions of Ordnance 69428 of the Revised City Code of the City of St. Louis; provided that nothing herein shall be construed to prohibit voluntary participation in the program under Ordinance #69428.” The TRO restrains enforcement until March 20, 2013 at 9:00 a.m. — the date of the follow-up hearing. However, the court’s order does provide for voluntary compliance with the ordinance pending resolution of the TRO.
Details of the Board Bill, which has become the ordinance, are as follows:
• The Board Bill applies to all homeowners’ principal residence in St. Louis City. It does not apply to property in St. Louis County as that is a separate municipality. It applies to single-family dwellings, one or more condominium or co-op units or structures containing not more than four residential units. Board Bill No. 160CS Section One, Paragraph 2.
• The Board Bill defines “Notice of Foreclosure” as “a written notice sent to the Homeowner of Lender’s intent to foreclose according to provisions of 443 R. S. Mo.” Board Bill No. 160CS Section One, Paragraph 4. The only notice sent to the homeowner under Chapter 443 RSMo is the statutory notice of the foreclosure sale, which must be issued not less than 20 days prior to the scheduled foreclosure sale. RSMo § 443.390.
• “Mediation Coordinator” is defined in the Board Bill as the person/entity designated by the County Executive to manage the mortgage foreclosure intervention program established by the Board Bill. Board Bill No. 160CS Section One, Paragraph 6. We understand that the mediation coordinator for St. Louis County will be US&M Midwest, Inc., 720 Olive Street, Suite 2300, St. Louis, Missouri 63101.
• The Board Bill provides that the mediation coordinator shall issue a “Certificate of Compliance” to the lender to certify the lender has complied with the mediation Board Bill, which certificate of compliance will be valid for the original foreclosure sale. The Board Bill lacks direct confirmation as to whether the certificate of compliance will be valid for a year, so additional confirmation is being sought from the office of the City Counselor. Board Bill No. 160CS Section Three, Paragraph 1.
• To comply with the Board Bill the homeowner must be provided a “Notice of Right to Request Mediation,” which advises the homeowner of the right to request mediation within 20 days from the date of the notice. A copy must be provided to the mediation coordinator. The notice shall be provided concurrently with the lender’s notice of foreclosure. The notice shall include a form promulgated by the mediation coordinator for the homeowner to make a written request for mediation. The notice to the mediation coordinator shall be accompanied by a $100 fee paid by the lender. Board Bill No. 160CS Section Three, Paragraphs 1 and 2.
• The homeowner has 20 days from the date the notice of mediation is mailed to request mediation. Board Bill No. 160CS Section Three, Paragraph 2.
• The mediation coordinator, within 15 days of receipt of the notice of right to request mediation, will make and document at least three attempts to contact the homeowner to inform the homeowner of the right to participate in a mediation conference. Board Bill No. 160CS Section Three, Paragraph 3.
• If the homeowner does not request mediation within 20 days of the notice of mediation or advises the mediation coordinator that he is not interested in mediation, the lender shall be deemed to have complied with the Board Bill and a certificate of compliance shall be issued to the lender within one business day. Board Bill No. 160CS Section Three, Paragraph 4.
• If the homeowner requests mediation, the mediation coordinator shall schedule a mediation conference within 60 days of the date the notice of mediation was mailed. The lender shall submit an additional $350 fee to the mediation coordinator not less than seven business days prior to the scheduled mediation. Board Bill No. 160CS Section Four, Paragraph 1.
• The written request to participate in the mediation conference by the homeowner shall be deemed consent by the homeowner for a continuance of the foreclosure sale for 42 days as allowed under Section 443.355(2). Board Bill No. 160CS Section Four, Paragraph 2.
• Not less than seven business days prior to mediation, the homeowner shall submit a completed financial statement, a completed housing affordability form, homeowner’s opinion of the condition of the property, and any offers the homeowner made to the lender to resolve the default. Board Bill No. 160CS Section Four, Paragraph 4.
• Not less than seven business days prior to mediation, the lender shall submit an appraisal or BPO completed not more than 90 days prior to the mediation, a written proposal to resolve the foreclosure, the evaluation methodology used to determine the eligibility of the homeowner, an estimate of the short sale value that the lender is willing to consider, and a statement of any offers made to the homeowner to resolve the default. 160CS Section Four, Paragraph 5.
• Not less than seven business days prior to mediation, both the lender and homeowner must provide a written, non-binding proposal for avoiding foreclosure. 160CS Section Four, Paragraph 6.
• Both lender and homeowner, or their authorized representatives, shall appear at the mediation. Any representative appearing must have full authority. A lender representative must have real-time access to the homeowner’s account information, have knowledge of loss mitigation, have the ability to review options based on the homeowner’s type of loan, and understand investor guidelines for the specific loan. If the lender is located outside the St. Louis Metropolitan Area, the lender may participate by electronic communication but, in that event, the lender must have counsel present at the mediation with signing authority. 160CS Section Four, Paragraph 7.
• A request for continuance of a scheduled mediation conference will be granted by the mediation coordinator only upon written request submitted prior to the mediation based on a showing of extraordinary circumstances or written agreement of the lender and the homeowner. 160CS Section Four, Paragraph 8.
• If the mediation results in a settlement, the mediation coordinator shall issue the certificate of compliance within one business day. 160CS Section Four, Paragraph 10.
• If mediation fails, “a good faith effort on behalf of the lender shall be deemed to satisfy the requirements of the ordinance.” The mediation coordinator shall issue the certificate of compliance if the lender has complied with the requirements of the Board Bill. 160CS Section Four, Paragraph 11.
• It is a violation of the Board Bill to file a trustee deed without filing a certificate of compliance with the assessor’s office before or contemporaneously with the recording of the trustee deed. However, the recorder of deeds shall not refuse to record a trustee deed for failure to comply with this Board Bill. 160CS Section Six, Paragraph 1. A person, firm, or entity convicted of violating the Board Bill shall be assessed a fine of up to $500. 160CS Section Seven.
• Nothing in the ordinance shall be construed to create any private right of action for any person or entity or to affect title to any residential property to which this code applies or to interfere with any private right of action not related to mediation requirement of the ordinance. 160CS Section Five, Paragraph 2.
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