2012 -- H 7225 SUBSTITUTE A

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LC00746/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO PROPERTY - FORM AND EFFECT OF CONVEYANCES

     Introduced By: Representatives Gallison, Silva, O`Neill, Keable, and Jackson

     Date Introduced: January 24, 2012

     Referred To: House Veterans` Affairs

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 34-27-4 of the General Laws in Chapter 34-27 entitled "Mortgage

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Foreclosure and Sale" is hereby amended to read as follows:

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     34-27-4. Publication of notice under power of sale Publication of notice under power

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of sale and rights of active military servicemembers. -- (a) Whenever any real estate shall be

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sold under any power of sale mortgage executed subsequent to May 4, 1911, and the mortgage

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shall provide for the giving of notice of the sale by publication in some public newspaper at least

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once a week for three (3) successive weeks before the sale, the first publication of the notice shall

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be at least twenty-one (21) days before the day of sale, including the day of the first publication in

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the computation, and the third publication of the notice shall be no fewer than seven (7) days

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before the original date of sale listed in the advertisement, including the day of the third

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publication in the computation, and no more than fourteen (14) days before the original date of

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sale listed in the advertisement. The sale may take place no more than fourteen (14) days from the

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date on which the third successive notice is published, excluding the day of the third publication

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in the computation. Provided, however, that if the sale is adjourned as provided in Rhode Island

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general laws section 34-11-22, and the adjourned sale is held during the same calendar week as

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the originally scheduled day of sale, no additional advertising is required. Otherwise, publication

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of the notice of the adjourned sale, together with a notice of the adjournment or adjournments,

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shall be continued at least once each week commencing with the calendar week following the

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originally scheduled day of sale; the sale, as so adjourned, shall take place during the same

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calendar week in which the last notice of the adjourned sale is published, at least one day after the

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date on which the last notice is published.

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      (b) Provided, however, that no notice shall be valid or effective unless the mortgagor has

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been mailed written notice of the time and place of sale by certified mail return receipt requested

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at the address of the real estate and, if different, at the mortgagor's address listed with the tax

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assessor's office of the city or town where the real estate is located or any other address

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mortgagor designates by written notice to mortgagee at his, her, or its last known address, at least

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twenty (20) days for mortgagors other than individual consumer mortgagors, and at least thirty

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(30) days for individual consumer mortgagors, days prior to the first publication, including the

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day of mailing in the computation. The mortgagee shall include in the foreclosure deed an

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affidavit of compliance with this provision.

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     (c) Provided further, that the notice mailed to the mortgagor in accordance with

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subsection (b) above shall also contain a copy of subsection (d) below (printed in not less than 12

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point type) headed by the following notice (printed in not less than 14 point type): “A

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servicemember on active duty or deployment or who has recently ceased such duty or deployment

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has certain rights under subsection 34-27-4(d) of the Rhode Island general laws set out below. To

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protect your rights if you are such a servicemember, you should give written notice to the servicer

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of the obligation or the attorney conducting the foreclosure, prior to the sale, that you are a

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servicemember on active duty or deployment or who has recently ceased such duty or

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deployment. This notice may be given on your behalf by your authorized representative. If you

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have any questions about this notice, you should consult with an attorney.” The mortgagee shall

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include in the foreclosure deed an affidavit of compliance with this provision.

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     (d) Foreclosure sales affecting servicemembers.-

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     (1) The following definitions shall apply to this subsection and to subsection (c):

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     (i) “Servicemember” means a member of the army, navy, air force, marine corps, or coast

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guard and members of the national guard or reserves called to active duty.

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     (ii) “Active duty” has the same meaning as the term is defined in 10 U.S.C. sections

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12301 through 12304. In the case of a member of the national guard, or reserves “active duty”

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means and includes service under a call to active service authorized by the president or the

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secretary of defense for a period of time of more than thirty (30) consecutive days under 32

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U.S.C. section 502(f), for the purposes of responding to a national emergency declared by the

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president and supported by federal funds.

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     (2) This subsection applies only to an obligation on real and related personal property

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owned by a service member that:

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     (i) Originated before the period of the servicemember's military service or in the case of a

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member of the national guard or reserves originated before being called into active duty and for

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which the servicemember is still obligated; and

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     (ii) Is secured by a mortgage or other security in the nature of a mortgage.

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     (3) Stay of right to foreclose by mortgagee. – Upon receipt of written notice from the

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mortgagor or mortgagor’s authorized representative that the mortgagor is participating in active

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duty or deployment or that the notice as provided in subsection (c) was received within nine (9)

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months of completion of active duty or deployment, the mortgagee shall be barred from

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proceeding with the execution of sale of the property as defined in the notice until such nine (9)

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month period has lapsed or until the mortgagee obtains court approval in accordance with

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subdivision (d)(5) below.

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     (4) Stay of proceedings and adjustment of obligation. – In the event a mortgagee

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proceeds with foreclosure of the property during, or within nine (9) months after a

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servicemember's period of active duty or deployment notwithstanding receipt of notice

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contemplated by subdivision (d)(3) above, the servicemember or his or her authorized

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representative may file a petition against the mortgagee seeking a stay of such foreclosure, after a

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hearing on such petition, and on its own motion, the court may:

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     (i) Stay the proceedings for a period of time as justice and equity require; or

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     (ii) Adjust the obligation as permitted by federal law to preserve the interests of all

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parties.

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     (5) Sale or foreclosure.- A sale, foreclosure or seizure of property for a breach of an

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obligation of a servicemember who is entitled to the benefits under subsection (d) and who

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provided the mortgagee with written notice permitted under subdivision (d)(3) shall not be valid

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if made during, or within nine (9) months after, the period of the servicemember's military service

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except:

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     (i) Upon a court order granted before such sale, foreclosure or seizure after hearing on a

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petition filed by the mortgagee against such servicemember; or

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     (ii) If made pursuant to an agreement of all parties.

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     (6) Penalties.- A mortgagee who knowingly makes or causes to be made a sale,

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foreclosure or seizure of property that is prohibited by subsection (d)(3) shall be fined the sum of

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one thousand dollars ($1,000), or imprisoned for not more than one year, or both. The remedies

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and rights provided hereunder are in addition to and do not preclude any remedy for wrongful

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conversion otherwise available under law to the person claiming relief under this section,

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including consequential and punitive damages.

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     (7) Any petition hereunder shall be commenced by action filed in the superior court for

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the county in which the property subject to the mortgage or other security in the nature of a

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mortgage is situated. Any hearing on such petition shall be conducted on an expedited basis

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following such notice and/or discovery as the court deems proper.

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     SECTION 2. This act shall take effect upon passage.

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LC00746/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PROPERTY - FORM AND EFFECT OF CONVEYANCES

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     This act would stay or prohibit the foreclosure on property owned by persons in the

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military under certain circumstances.

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     This act would take effect upon passage.

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LC00746/SUB A

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