Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Rhode Island Foreclosure Law
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of
Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Varies by Process
- Deficiency Judgments Allowed: Yes
In Rhode Island,
lenders may foreclose on deeds of trusts or
mortgages in default: 1) by using the judicial
foreclosure process; 2) by filing a lawsuit seeking
eviction; 3) by taking possession of the house; 4)
by the borrower voluntarily giving up possession; or
5) by using the non-judicial foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves
filing a lawsuit to obtain a court order to
foreclose, is used when no power of sale is present
in the mortgage or deed of trust. Generally, after
the court declares a foreclosure, your home will be
auctioned off to the highest bidder.
Special Procedures
In instances where the lender takes possession of
the house, they must do so peaceably and in the
presence of two witnesses. Said witnesses must give
a certificate of possession, which must then be
notarized. Additionally, borrowers who voluntarily
give up possession of the property must do so in the
presence of a notary. In these instances, the lender
will obtain the full title to the property if they
are able to maintain possession for an established
period of time.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed
of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the
balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the
property may be executed by the lender or their
representative, typically referred to as the
trustee. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a
power of sale clause and specifies the time,
place and terms of sale, then the specified
procedure must be followed. Otherwise, the
non-judicial power of sale foreclosure is
carried out as follows:
The lender must mail a written notice of
the time and place of sale, by certified
mail, return receipt requested, to the
borrower at his or her last known address,
at least twenty (20) days prior to the first
publication, including the day of mailing in
the computation.
The lender must give notice of the sale by
publication in some public newspaper at
least once a week for three (3) successive
weeks before the sale, with the first
publication of the notice being at least
twenty-one (21) days before the day of sale,
including the day of the first publication
in the computation.
Said notice must contain the names of the
borrower and lender, the mortgage date, the
amount due, a description of the premises
and the time and place of sale.
Any person may bid at the sale,
including the lender.
