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Rhode Island: Recent Amendment to Mediation Statute Revives 45-Day Notice of Intent to Foreclose

Posted By USFN, Tuesday, August 14, 2018
Updated: Wednesday, August 8, 2018

August 14, 2018

by Joseph A. Camillo, Jr.
Shechtman Halperin Savage, LLP – USFN Member (Rhode Island)

There has been a significant change in Rhode Island law that will impact pending foreclosure sales. Specifically, last month Governor Raimondo signed legislation making changes to section 34-27-3.2, which deals with requirements for foreclosure mediation conferences (the Act). The legislation makes the following changes to the Act:

1. Extends the sunset date of the Act from July 1, 2018 to July 1, 2023.
2. Limits the initial fee charged for mediation to $100 from $150, while increasing the mediation conference fee from $350 to $400.

The issue that impacts pending sales is that the legislators inadvertently amended an older 2013 version of RIGL 34-27-3.2 rather than the 2014 version. The 2014 version of the statute repealed RIGL 34-27-3.1, the section requiring the 45-Day Notice of Intent to Foreclose/Credit Counseling Notice (NOI). Because they amended the 2013 version of the statute, it did not contain the repeal of the 45-Day NOI requirement (RIGL 34-27-3.1). Consequently, the 2014 version of 34-27-3.2 that repealed 34-27-3.1 sunset at the end of June 2018. The ramification is that foreclosures for the time being are again subject to the 45-Day NOI requirement (34-27-3.1).

This author’s firm has discussed this subject with the title insurance companies, and they have confirmed that 34-27-3.1 notices are again required for any foreclosure that was initiated on or after July 1, 2018 (meaning the sending of the 30-Day notice of sale). Any foreclosure auction where notices were sent after July 1, 2018 will have to be cancelled so that the 45-Day NOI can be sent. There is some discussion (and hope) that the legislature will reconvene in an emergency session to correct the error, but there is no confirmation at this time that this will happen.

If servicers/banks are unsure as to how this impacts their pending sales in Rhode Island, they should reach out to their counsel for an update of which sales need to be cancelled to allow the 45-Day NOI to be sent.

The Department of Business Regulation (Banking Division) has provided a template that is required to be used when the notices are sent; view here. Please note that there must be a valid assignment of mortgage in existence (at the time that the credit counseling notice is sent) into the “mortgagee” referenced in the NOI, and in whose name the nonjudicial foreclosure will be pursued.

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July/August e-Update

Note for consideration of the USFN Award of Excellence: This article is not a "Feature."


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