February 6, 2015
by Joseph A. Camillo
Shechtman Halperin Savage, LLP – USFN Member (Rhode Island)
As you may be aware, Rhode Island enacted mediation legislation superseding several local ordinances. On July 8, 2014, the governor signed legislation amending the statute to clarify that process. It took effect on October 6, 2014, and any mediation notices that are not sent within 120 days of the default date are subject to penalties at a rate of $1,000 per month. These penalties are assessed to the servicer/mortgagee and must be paid in order to obtain a Certificate Authorizing Foreclosure.
On January 6, 2015, Rhode Island Housing held an open conference call to answer additional questions about the mediation process, and circulated a PowerPoint presentation. In that presentation, it was advised that mortgagees must pay any penalty or fees for loans with default dates of June 10, 2014 or earlier, by February 28, 2015; or the servicer will have to send new mediation notices and pay the penalty for additional days. This applies just to loans for which an invoice has already been sent to the mortgagee for penalties. Invoices are generated by Rhode Island Housing only after it has received a copy of the notice of mediation containing the default date, from which it determines the penalty to be paid.
Going forward, all penalties need to be paid within 90 days from the date Rhode Island Housing sends out the first invoice. If payment of penalties is not received from the servicer, no certificate will be issued, and a new mediation notice will be required. This will result in additional penalties accruing up to the date of the new notice.
Additionally, Certificates Authorizing Foreclosure are sent by Rhode Island Housing to the single point of contact provided on the notice. Should these certificates be lost, a duplicate certificate is needed, at a cost of $25. These certificates may only be requested by mail, and the $25 check must be included in order to obtain a certificate.
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