Rhode Island foreclosure law

Rhode Island allows its lenders to foreclose in both judicial and non-judicial methods, as well as a number of special procedures. Both mortgages and deeds of trust are considered primary instruments, and the average wait time is 60 days (around two months).

Judicial foreclosure
A judicial foreclosure is followed when the contract does not contain a Power of Sale clause, which would otherwise allow the lender to sell the home directly. In a Rhode Island judicial foreclosure, the lender files a lawsuit against the borrower, and if the court confirms the default, the home is sold off in a public auction.

Non-judicial foreclosure
If the contract includes a Power of Sale, the lender can use a non-judicial foreclosure process. The clause serves as a pre-authorization for the lender to sell the home as payment in case the borrower defaults. The authority may be exercised by the lender, or extended to a representative known as the trustee.

Generally, the terms outlined in the Power of Sale will be followed throughout the foreclosure. If the clause does not indicate the time, date, and place of the sale, the foreclosure will proceed as follows:

First, the lender sends a notice of the sale to the borrower by certified mail, with a request for a return receipt. The notice contains the names of the lender and the borrower, the date the mortgage was originated, a description of the home, and the scheduled time and place of the sale.

At least 20 days after the notice is mailed, the same notice is posted on a public newspaper and appears once a week for three consecutive weeks. The first ad appears no less than 21 days before the sale date.

If the borrower fails to cure the default before the given deadline, the foreclosure will proceed as stated in the mortgage. The auction is open to everyone, including the lender, and the home is sold to the highest bidder.

Special procedures
Lenders can also foreclose by peaceably (without force) taking possession of the home, as long as they do so with two witnesses present. The witnesses will then issue a certificate of possession, which has to be notarized.

Borrowers also have the option to voluntarily surrender their home to the lender. This must be done in the presence of a notary. If the lender maintains possession of the home for a given period, he or she obtains the full title to the property.

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