Rhode Island Foreclosure Laws
The foreclosure laws in Rhode Island are based around the lien mortgage theory. This theory states that the title to the property resides with the borrower as long as the terms of the mortgage contract are being fulfilled. The foreclosure process may be completed within 60 to 80 days, if the borrower chooses not to contest the proceedings.
Other People Are Reading
-
Judicial and Non-Judicial Foreclosure
-
Several methods exist to foreclose a property in Rhode Island. The judicial foreclosure process mandates that the lender obtain a court order once the borrower falls behind in payments. Once this happens, the property is generally sold to the highest bidder. A non-judicial foreclosure allows the lender to insert a power of sale clause into the mortgage contract. This clause gives the lender the right to foreclose on the property without the need for a court order.
Special Procedure
-
Rhode Island also allows for other foreclosure procedures. The borrower may voluntarily give the deed to the lender or the lender may pursue eviction proceedings, as opposed to a foreclosure. These procedures, unlike a foreclosure, do not require the lender to sell the home to the highest bidder. In cases where the lender takes direct possession of the property, two witnesses must provide a notarized certificate of possession, and the borrower must give the deed to the lender in the presence of a notary.
-
Power of Sale
-
When the non-judiciary method is used to add a power of sale clause to the mortgage contract, this clause will typically spell out the steps required to complete the process. In the event this does not occur, then the state of Rhode Island has certain minimum requirements. A notice must be mailed to the borrower at least 20 days before the sale is scheduled to take place. An advertisement must also appear in the local newspaper for a minimum of three successive weeks prior to the sale.
The first such notice must appear at least 21 days before the sale occurs.
Deficiency and Right of Redemption
-
A deficiency can occur if the home sells for less than the balance due on the mortgage loan. In the state of Rhode Island, the lender may pursue a judgment against the former borrower for payment of the difference. In most cases once the sale of the home is complete, the borrower has no other option to reclaim the property. However, in certain cases, the owner may be able to reclaim the property up to three years after the sale by paying the entire balance of the loan, plus foreclosure costs.
-
