Rhode Island lenders may foreclose on a property through the court system or outside of the court system, depending on the terms of the mortgage agreement. If the mortgage agreement contains a power of sale clause then the lender can proceed to foreclosure without court involvement. The lender must provide the public notice required by state law and the sheriff must conduct the sale in accordance with state law.
If the mortgage agreement does not contain a power of sale clause then the lender must proceed to court to sue a buyer who is allegedly in default. If the buyer is in default then the court will issue an order of foreclosure which will allow the property to be foreclosed at a public sale.
Rhode Island law also allows a lender to take possession of a property if the buyer is in default. In order to foreclose on a property in this manner, the lender must take possession of the property peacefully and at least two witnesses must be present to attest to the transfer of possession. A lender can also take possession of the property if the lender has the agreement of the borrower who is in default on the mortgage loan.
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