In a continuing problem with foreclosures plaguing St. Louis County, lending companies are seeking the enforcement of a restraining order that could prevent residents from taking advantage of a new law that would require civil mediation proceedings to determine the outcome of the pending foreclosures.

Now, a heated legal battle is taking place between bankers and St. Louis County over whether or not the county has the right to enforce the new law.

St. Louis City Mayor Francis Slay claims that the city shove move on with a similar law and that mediation attorneys are watching the cases unfold. He also stated that the resolve of the city is remaining strong and that they will push on, not allowing the lenders' restraining order attempts keep them from continuing to fight for their cause.

What The Mediation Services Could Mean for Both Homeowners and Lenders

Requiring mediation before foreclosure could mean that banks will be forced to take a closer look into the circumstances that cause homeowners to get behind on their house payments and such. Slay said, “We want to do everything we can to try to help people stay in their homes. It's good for families, it's good for neighborhoods, and most importantly it's the right thing to do for people.”

However, bankers claim that requiring mediation in the case of foreclosure could cause damage the availability of credit for new home loans and that they're just as prepared for their fight as St. Louis County. The Missouri Bankers Association issued a statement threatening to sue the city of St. Louis if it continues to push for the mediation law.

St. Louis Professor Getting Involved in Pushing Civil Mediation

Foreclosures cause a ripple effect in cities that can be quite devastating to citizens, neighborhoods, and the concept of community. University of Missouri-St. Louis professor Todd Swanstrom has been studying the city's problem with foreclosures. He said that St. Louis County has over 4,000 foreclosures a year, that foreclosures lower property values by about 1 billion dollars a year, that they diminish the tax base, and have a negative long term effect on children wrapped up in the problem in that they miss out on school when they are forced to move.