Rhode Island Adopts Provisions Regarding Mortgage Foreclosure Disclosures
The Rhode Island Department of Business Regulation has recently adopted provisions relating to mortgage foreclosure disclosures, which are effective immediately.
The new provisions specify that prior to initiating the foreclosure process, a mortgagee must provide a Notice of Pending Foreclosure to the mortgagor of the residential real estate at issue (provided in a bulletin issued by the Department pursuant to R.I. Gen. Laws § 34-27-7), as well as a written Notice of Mediation Conference.
The Notice of Mediation Conference must be provided to all mortgagors of the real estate at issue prior to initiating the foreclosure process. The notice must be sent to the address of the real estate and, if different, the address designated by the individual mortgagor as his or her address for receipt of notices. A copy of the Notice of Mediation Conference must also be sent by mail to the mediation coordinator, along with contact information for a single mortgagee point of contact to handle all communications with the mediation coordinator.
The regulations provide that a sixty day timeline for scheduling a mediation conference will then begin once the Notice of Mediation Conference, single point of contact for the mortgagee, and payment for initiating the mediation process have been received by the medication coordinator. If the mortgagors reside at the same address, they may be sent the Notice of Mediation Conference as one notice listing all mortgagors. If the mortgagors reside at different addresses, then separate Notices of Mediation Conference (listing each mortgagor separately) must be mailed to each mortgagor at his or her respective address.
The provisions add that the mortgagee must designate an agent to participate in the mediation conference and respond to all requests from the mediation coordinator, mortgagor, or counselor assisting the mortgagor within a reasonable time up to 14 days. If the mortgagee declines to accept the mortgagor’s “workout agreement,” if any, then the mortgagee must provide a detailed statement documenting the reasons for rejecting the proposal, within 14 days.
If the mortgagee and mortgagor come to a written agreement, then upon receipt of the agreement and payment of all fees and penalties, the mediation coordinator must issue a Certificate of Eligible Workout Agreement, if the workout agreement would result in a net financial benefit to the mortgagor as compared to the terms of the original mortgage. Finally, all written correspondence and documents related to the mediation conference process received by or submitted to the mediation coordinator must be provided to the mortgagee and maintained by the mortgagee consistent with the Department’s record-keeping requirements.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
Comments are closed.