Foreclosure & Alternatives Law
If you start to miss mortgage payments in Rhode Island, and if it becomes clear to your bank or mortgage lender that you are not going to make more payments in the future or pay off the back payments, the lender may start a foreclosure lawsuit. This lawsuit will have the end goal of removing you from the property, taking away any ownerships rights that you had over that property, and returning full ownership to the lender. The lender can then do whatever they desire with the property, though this almost always means that they hold an auction and sell it.
While this can be a difficult time, you do have some options, and you do have some rights. No matter where you are in the process, make sure that you know what these are.
For example, do you have a high cost mortgage? Do you also think that the lender's actions were in violation of the Rhode Island Home Loan Protection Act? This act, for instance, keeps them from using balloon payments. If you think it was violated, you have the right to go to the court and request that they stop the foreclosure on those grounds.
Another thing to consider is military service. If you are in the armed forces, you may know that the Service members Civil Relief Act was passed to ensure that you are back from active duty before a foreclosure begins. In Rhode Island, you can also use this same protection if you are in the National Guard. You do have to be on active duty for 90 days straight, though.
Foreclosure law in Rhode Island also ensures that you know about the foreclosure well in advance. You must get your first notice a full 45 days before the lawsuit can be filed. This notice must also direct you to financial counseling.
On top of that, you must get both a mediation notice and a notice of sale. You have to get this 30 days before the lender can then publish the notice of sale, which will be published for three weeks in a row, for a total of 21 days -— or a maximum of 28 days —- before the sale happens.
Even when the lender's foreclosure is successful and you must vacate the property, you are given time to do so. After the eviction notice, you have another 20 days to either leave the property or respond to said notice.
If you would like to keep your property by paying off the missed payments and fees so that the loan can be reinstated, it is up to your lender. This will have been laid out in your mortgage papers, and the law does not require you to be given this alternative. For many foreclosures, you are also not given the lawful right to redeem a home that has been sold, at least with regard to a nonjudicial foreclosure. If it was instead a foreclosure that came about due to the process of law or because of open, peaceable entry, you have three years to redeem it. The majority of the foreclosures in the state are nonjudicial foreclosures, however.