Rhode Island Foreclosure Prevention Efforts

For 2009, Rhode Island ranked 27th among all states in foreclosure rate, a drop of 23.06% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.

Most Rhode Island foreclosures are non judicial because of a power of sale clause in state mortgages that allows a lender to sell the property if the borrower defaults. The process begins when the lender forwards all relevant documentation to an attorney to do a title search. If there is a problem with the title, the procedure moves to the courts. Otherwise, the lender must give borrowers notice of a foreclosure sale at least 20 days prior to starting to advertise the sale. The foreclosure must be advertised for three consecutive weeks in a local newspaper. The first notice must be published at least 22 days prior to the date of the foreclosure auction. Deficiency judgments are allowed.

The capitol, Providence, has the most foreclosed properties in the state. A city ordinance passed in 2009 requires lenders who hold the note on owner occupied homes to engage in third party mediation prior to initiating foreclosures. Neighboring Cranston, RI is considering the adoption of a similar ordinance. HB 5492 was introduced in the state legislature to do the same state wide, but has yet to pass. A bill to arrange a six month foreclosure was placed on hold by the state assembly.

Rhode Island Housing is public state agency funded by tax exempt bonds. Its goal is to provide safe, healthy homes for those who live and work in the state.

It urges distressed mortgage borrowers to:

1. Immediately contact your lender or loan servicer.
2. Open and respond to all mail from your lender.
3. Know your mortgage rights.
4. Understand foreclosure-prevention options.
5. Contact an independent US Department of Housing and Urban Development, HUD-approved foreclosure avoidance counselor.  You can also call 800 569-4287 (TTY 800 877-8339).
6. Prioritize your debts.
7. Use your assets.
8. Avoid foreclosure prevention companies.
9. Don’t lose your home to foreclosure recovery scams.

Rhode Island Housing’s Help Center offers trained counselors who will assess your specific situation to help you avoid losing your home. In fact it will also address one problem that has dogged this crisis. Within being chastening you can expect counselors there to fully explain the terms of your mortgage and help you understand what to expect. Rhode Island Housing can be reached at:

Rhode Island Housing
44 Washington Street
Providence, RI 02903

Main Switchboard: 401 457-1234
Toll Free: 800 427-5560
TTY: 401 450-1394
Para Espanól: 401 457-1122