Rhode Island Foreclosure Laws

Questions

Answers

How are mortgage liens treated in Rhode Island?

Rhode Island was generally known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. Rhode Island also has a non-judicial foreclosure process and several possessory actions including eviction, deed in lieu and taking possession of property. Non-judicial actions are more common now in the state.

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How are Rhode Island mortgages foreclosed?

In Rhode Island, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon. A possessory action involves the lender taking possession of the property before witnesses who provide a notarized statement called a certificate of possession.

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What are the legal instruments that establish a Rhode Island mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in Rhode Island?

Depending on the court schedule, it usually takes approximately 60-80 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. non-judicial foreclosures require twenty-one (21) days notice before the sale.

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Is there a right of redemption in Rhode Island?

Generally No. In a non-judicial foreclosure Rhode Island has no post sale general statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. In certain judicial possessory actions a right to redemption will be permitted up to three (3) years.

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Are deficiency judgments permitted in Rhode Island?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures.  This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan.

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What statutes govern Rhode Island foreclosures?

The laws that govern Rhode Island foreclosures are found in State of Rhode Island General Laws, Title 34 (Property), Chapter 34-27 (Mortgage Foreclosure and Sale).

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