Foreclosure Guidelines in Rhode Island

Highlights:

Judicial/ Non-Judicial Foreclosure: Both Judicial and Non-Judicial Foreclosure

Right of Redemption / Deficiency Judgment: Depends / Yes

Timeline: 60 Days, Can vary depending on individual cases

Deed of Trust / Mortgage as Security Instruments: Deed of Trust, Mortgage

 

Judicial Foreclosure process: 

In case there is no power of sale clause in the Deed of Trust or Mortgage documents, the Judicial foreclosure process is followed. In this process, the lender files a lawsuit against the borrower, in case the latter happens to default on their mortgage payments. The court verifies the same and initiates the foreclosure procedure where the property is sold off to the highest bidder through a public auction.

Special Foreclosure process:

In Rhode Island, certain special foreclosure processes can be followed, other than the Judicial and Non-Judicial foreclosure processes.

The lender can file a lawsuit with the court seeking the eviction of the borrower from the mortgage property. Or,

The lender can peaceably occupy/ take possession of the property in the presence of two witnesses and the same must be notarized. Or,

The borrower can voluntarily give up their possession of the property, in the presence of a notary.

The lender gets the full title to the property once they complete a certain period of possessing the said property.

Non-Judicial Foreclosure process:

If a power of sale clause exists in either the Deed of Trust or Mortgage documents, the Non-Judicial foreclosure process can be followed. The power of sale clause authorizes the lender or their authorized representative (referred to as Trustee) to conduct the foreclosure proceedings in case the borrower happens to default on their mortgage payments. The following guidelines can be followed for the same.

If the power of sale document mentions the time, location and other terms of the foreclosure sale, it is followed as such. Otherwise, the following procedures are followed.

The lender should send a notice regarding the time, date and location of the foreclosure sale to the borrower at their last known correspondence address by registered post (return receipt requested) at least 20 days before the publication of the notice as an advertisement in the local newspaper.

The notice should be advertised, with the first ad carried at least 21 days before the foreclosure sale date for three consecutive weeks (minimum one day per week), in a local newspaper.

This notice should contain all the details of the borrower/ lender, their correspondence addresses, property location and other details, foreclosure sale time, date, location, terms of foreclosure sale, etc.

During the foreclosure sale, anyone can bid for the property (except the lender) and the property is sold to the highest bidder through an auction.