If you're struggling to make your mortgage payments and you live in the state of Rhode Island, you probably have questions about what will happen if your lender starts a foreclosure against you and what your rights are during the process. For example: What is the most common type of foreclosure procedure in Rhode Island? Will you have the right to reinstate your mortgage if you default on the payments? Is it possible to get the home back after the foreclosure by redeeming it? Can your lender get a deficiency judgment after the foreclosure in Rhode Island?
Keep reading to find the answers to these questions, and others. Below you’ll find guidance on the key parts of Rhode Island’s foreclosure law along with citations to the statutes so you can read the law yourself.
The citations to Rhode Island’s foreclosure statutes are:
You can find the State of Rhode Island General Laws on the Rhode Island General Assembly’s website.
We've summarized the significant parts of Rhode Island’s foreclosure laws in this article.
Foreclosures in Rhode Island are usually nonjudicial, which means the foreclosure takes place outside of court. Judicial foreclosures (which go through the court system) are also possible in Rhode Island, but not common.
Because most foreclosures in Rhode Island are nonjudicial, this article focuses on that process.
In Rhode Island, the foreclosing party is required to give a defaulting borrower a mediation notice and a notice of sale.
45-day notice. The lender mails a notice of default that describes counseling available through HUD-approved agencies to the borrower at least 45 days before starting the foreclosure.
Mediation notice. Also before starting a foreclosure, Rhode Island law requires lenders (or its agent or employee) to provide written notice that it may not foreclose on the mortgaged property without first participating in a mediation conference. (R.I. Gen. Laws § 34-27-3.2). This requirement applies to a first-lien mortgage on any owner-occupied, one-to-four unit residential property that serves as the borrower's primary residence. Rhode Island's mediation program is set to end on July 1, 2023.
Notice of sale. The foreclosing party must publish a notice of sale in a newspaper weekly for three weeks and mail the notice to the borrower at least 30 days before the first publication date. (R.I. Gen. Laws § 34-27-4).
“Reinstating” is when you catch up on the missed payments (plus fees and costs) in order to stop a foreclosure. Rhode Island law does not provide the borrower with a right to reinstate, but most Rhode Island mortgages permit reinstatement of the loan under certain circumstances. Check your loan documents.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure. In Rhode Island, foreclosed homeowners cannot redeem the home following a nonjudicial foreclosure.
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Rhode Island, a deficiency judgment is allowed following a nonjudicial foreclosure if the foreclosing party files a separate lawsuit.
Consider talking to a lawyer if you want to get more information about foreclosure procedures in Rhode Island or find out about potential defenses to a foreclosure. Moreover, it's a good idea to make an appointment to speak to a HUD-approved housing counselor to learn about different alternatives to foreclosure.