Rhode Island Amends Provisions Regarding Mortgage Foreclosure and Sale
The state of Rhode Island has recently amended Section 34-27-6 of the General Laws in Chapter 34-27, which relates to mortgage foreclosure and sale. These updates are effective immediately.
The updated provisions provide for an increase in penalties for financial institutions that fail to promptly record foreclosure deeds, and fail to promptly pay outstanding taxes.
The law first deals with the issue of recording, stating that in the event of a public auction made according to the provisions of any mortgage of real estate, if a mortgagee (or affiliate) is the successful bidder for the property, the foreclosure deed must be recorded in the records of land evidence for the municipality where the real estate is located within 45 days after the date of the sale. The deed must include the date of the foreclosure, and must be captioned “foreclosure deed.”
The other issue that the update addresses is the payment of outstanding taxes. It states that the grantee of real estate named in the foreclosure deed must pay all taxes and other assessments (including water charges, interest, and penalties) due to the municipality, on or before the date the foreclosure deed is recorded. The only exception would be if the grantee applied for a municipal lien certificate, in which case the taxes would be due within 30 days after the certificate is mailed by the tax collector.
The provisions increase the monthly penalty from $40 to $300 per month for violations of either of these sections. However a maximum aggregate penalty of $2,000 has been added. Finally, the provisions add that any mortgagee that is not licensed as a financial lending institutions, but that is holding a mortgage by private agreement with another party, is exempted from these penalties.