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Home foreclosure legislation puts city, state governments at odds


The Missouri senate passed legislation Monday that would prevent local municipalities from making laws regarding mediation in home foreclosures.

The legislation, initially proposed by state Representatives, John Diehl and Stanley Cox, establishes that laws regarding real-estate foreclosures can only be created at the state or federal level — not at the city level.

This legislation comes as a reaction to ordinances passed by both St. Louis city and county in August, which required banks to offer mediation as an option to home owners who defaulted on loans. Alex Curchin is general counsel for the Missouri Chamber of Commerce, which supports the state legislation.

“Local ordinances add an undue burden to banks for tracking purposes and tracking local ordinances, which would increase the cost the lending to banks, and in the end hurt, consumers,” Curchin said.

Democratic Senator Gina Walsh of Saint Louis opposes the legislation. She said while these rules might be more difficult for banks — it's worse for consumers.

“It’s devastating for the people that are losing their homes or for the people that have to put their kids in the back of cars because they have nowhere to sleep that night,” Walsh said.

State Representative, Steve Cox said if bank funds are used in mediation, it will hurt consumers in other areas of the housing market.

“If you put additional burdens on the financial institutions, they’re going to adjust for it and charge more money," Cox said.

Walsh said she is in favor of future state-wide regulation.

The legislation now goes to Gov. Jay Nixon’s office where he will decide its fate.