Rhode Island Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: Varies
Deficiency Judgments Allowed: Yes
Time Frame: 60 Days
Public Notice: Publication
Rhode Island is a lien theory state, which means that the borrower’s property acts as security for their loan. A property title in Rhode Island can either be secured by a mortgage or a deed of trust, both of which serve the same purpose.
If a borrower defaults in the state, lenders may pursue several types of foreclosures methods. Judicial foreclosure, non-judicial foreclosure, peaceful possession or the borrower may also give up their property of their own accord. A mortgagor’s right of redemption varies, but generally is limited to three (3) years. If a foreclosure is sold for less than what was owed on it, borrowers may seek a deficiency judgment to sue the borrower for the difference in price.
Types of Foreclosures Allowed in Rhode Island
Judicial foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The lender must file a lawsuit against the borrower in a court with jurisdiction over the area where the property is located. If the court declares foreclosure, the borrower’s property will be auctioned off to the highest bidder.
Non-judicial foreclosure, which is also known as foreclosure by power of sale, involves selling the property without court supervision. In order for non-judicial foreclosure in Rhode Island to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default to be able to recover what is owed on the property.
There are two ways in which a non-judicial foreclosure in Rhode Island can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following guidelines must be followed:
1. The lender must publish a notice of the sale in a newspaper that circulates where the property is located at least once a week for three (3) consecutive weeks prior to the sale. The first publication must be at least twenty-one (21) days before the date of the sale.
2. The lender must also inform the borrower via certified mail, return receipt requested, about the time and place of the sale at least twenty (20) days before the first publication.
3. The notice must contain the names of the borrower and lender, the date of the mortgage, the amount of the default, property description and information regarding when and where the sale will take place.
4. The sale will be conducted by the county sheriff or deputy between 9 am and 5 pm at the location specified in the notice. Anyone may bid at the sale, including the lender. The property will be auctioned off to the highest bidder.
Other Foreclosure Methods
In addition, lenders in Rhode Island can also foreclose on a property by taking possession of the property peaceably and with two witnesses present or the borrower may voluntarily give it up. If the borrower gives up their property, a notary public must be present. The lender will then obtain the title to the property.
Working with a Foreclosure Lawyer in Rhode Island
Receiving a foreclosure notice can be devastating. Unfortunately, though, with the current situation of the U.S. economy, foreclosure is a very real threat to many homeowners. Although receiving a foreclosure notice can be frightening, there is still a way to stop your home from being seized. Turn to a leading foreclosure lawyer in Rhode Island for help right away to protect your property from repossession.
Foreclosure attorneys do whatever it takes to ensure you don’t lost your home. They will come up with a plan as an alternative to foreclosure that both you and your lender can work with. Your foreclosure lawyer may suggest mortgage modification, refinancing or even a temporary halt in payments. Regardless of the proposal, rest assured that your case will end with the best possible outcome when you work with a top Rhode Island foreclosure attorney.
Whether you defaulted because of pay cuts, job loss or any other reason, you have rights as a homeowner in Rhode Island. Contact an acclaimed team of foreclosure lawyers in Rhode Island to prevent your home from being seized.