Rhode Island Foreclosures
Rhode Island State Foreclosure Law dictates that lenders may avail of the Judicial and Non-Judicial processes to foreclose deeds of trust or mortgages in default. They may also foreclose by filing a lawsuit seeking eviction, by taking possession of the property, or by the borrower voluntarily giving up possession. The typical time of process last about 60days and the deeds of trust and mortgages are the primary security instruments used. Deficiency Judgments are allowed in the state and the Right of Redemption depends upon the process employed.
Judicial Foreclosure is used when no power of sale exists in the security instruments. Petitioners must file a lawsuit in order to obtain a court order to foreclose. It has been a general practice that when the court declares a foreclosure, the property will be auctioned off and will subsequently be awarded to the highest bidder. On the other hand, Non-Judicial Foreclosure is used when a power of sale clause is expressed in the security instruments. “Power of Sale” is the process wherein the borrower agrees to sell the property in dispute to settle the remaining balance from a loan in case of default. Its most obvious difference from the judicial foreclosure is that it doesn’t need any court order to auction off the property as it is already stated in the security instruments. The lender or their duly designated representative, commonly referred to as the “trustee,” may execute the “power of sale.”
Rhode Island Power of Sale Foreclosure Guideline
Should the security instruments contain a power of sale clause, the terms specified therein should be strictly followed. Otherwise, the non-judicial foreclosure should be carried out according to the process specified as follows:
- The lender must publish a notice of the sale in a county newspaper of the property’s locale at least once a week for 3 consecutive weeks before the sale. The first notice should have been published at least 21 days before the sale, including the day of the first publication in the computation.
- The lender must mail a written notice, by certified mail, return receipt requested, to the borrower at his or her last known address, at least 20 days before the first publication, including the day of mailing in the computation. The notice must clearly indicate the names of the borrower and lender, the mortgage date, the amount due, a legal description of the property, and the time and place of the sale.
The sale will be conducted through a public bidding where the property will be awarded to the highest bidder. The bidding will be open to everyone, including the lender.
Special Procedures
In instances where the lender takes possession of the foreclosed property, they must do so without any disturbance of peace and in the presence of 2 witnesses. The 2 witnesses must sign a certificate of possession, which must then be notarized. In case of the borrower voluntarily giving up possession of the foreclosed property, they must do it in the presence of a notary, which will attest to it. In these instances, the lender will obtain the title to the property if they are able to maintain possession for an established period of time.
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