RI Underwriting Summary

Foreclosure Review

• Mortgages and Deeds of Trust are both recognized in Rhode Island.
• The most common form of Security Instrument is usually called a "Mortgage Deed" and is typically a mortgage that contains a Power of Sale clause.
• Only Mortgages and Deeds of Trust the contain a Power of Sale Clause may be foreclosed non-judicially.

Judicial Foreclosure

This type of foreclosure is not as common in Rhode Island and is primarily used for Security Instruments that do not contain a Power of Sale clause.

Other Forms of Foreclosure

Foreclosure by Peaceable Entry is also permitted in Rhode Island. 34-23-3. This is almost never used.

Non-Judicial Foreclosure

• Non-Judicial foreclosure in Rhode Island is similar to other New England states which differs somewhat from non-judicial foreclosure in other states.
• Foreclosure is commenced outside of the public records, so there will not be any indication of a non-judicial foreclosure in the public records until the foreclosure deed has been recorded.
• Review of a non-judicial foreclosure requires review of the foreclosure deed and several documents that are typically recorded with the foreclosure deed. Key documents are:
  • Foreclosure Deed - Usually title as "Foreclosure Deed Under Power of Sale in Mortgage" or something similar
  • Affidavit of Sale - This must show compliance with requirements regarding foreclosure notices, legal advertisements, and the provisions of the SCRA. R.I.G.L. § 34-11-22.
  • Affidavit of Exemption (if applicable) - Foreclosures commenced from 2013 on may have these to demonstrate that the foreclosure is exempt from mediation requirements pursuant R.I.G.L. § 34-27-3.2 because the mortgage was more than 120 days delinquent with the law was implemented.
  • Affidavit of Compliance - Foreclosures from 2009 until 2013 may have these to demonstrate compliance with local mediation conferences that were implemented in 2009 pursuant to R.I.G.L. § 34-27-3.1. These procedures were superseded by a uniform state requirement implemented September 13, 2013 pursuant to R.I.G.L. § 34-27-3.2.
  • NOTE: The above list does not cover all of the requirements to ensure a valid foreclosure, but the basics that should be reviewed by a title examiner.
• The IRS/USA or any branch of the federal government must be served notice of the foreclosure as required by federal law.
• Senior liens cannot be discharged in a foreclosure.
• Junior liens other than federal liens are not entitled to receive any separate notice of the foreclosure.
• Properties are publicly auctioned.
• There is no right of redemption in any parties once the sale has been completed except for those given for federal liens.
• Actions to eject a holdover tenant including any foreclosed borrowers must be pursued in a separate legal action pursuant to R.I.G.L. § 34-18-38.