2012 -- H 7658

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LC01495

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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 - MORTGAGE FORECLOSURE AND SALE

     Introduced By: Representatives Williams, Carnevale, Hull, Cimini, and Tarro

     Date Introduced: February 16, 2012

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 34-27-6 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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     34-27-6. Payment of outstanding taxes. -- (a) In connection with any sale by public

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auction made under and according to the provisions of any mortgage of real estate or any power

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of sale contained therein or annexed thereto, if the mortgagee or an affiliate of the mortgagee

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(other than a municipality) is the successful bidder for the real estate or property offered for sale,

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the foreclosure deed shall be recorded in the records of land evidence for the municipality where

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the real estate is located within forty-five (45) thirty (30) days after the date of the sale. The deed

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shall be captioned "foreclosure deed" and the date of the foreclosure shall be stated in the deed.

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This subsection (a) shall not apply to any such sale if, prior to the recording of the foreclosure

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deed: (1) the mortgagor files a voluntary proceeding, or an order for relief is entered in any

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involuntary proceeding against the mortgagor, under any federal or state bankruptcy or

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insolvency statute; or (2) the mortgagee abandons or otherwise terminates such sale.

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      (b) Notwithstanding any other general law or local ordinance to the contrary, the grantee

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of real estate named in the foreclosure deed shall pay to the municipality, on or before the date

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the foreclosure deed is recorded, all taxes and other assessments, including water charges, interest

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and penalties, if any, which constitute liens on the real estate described in the foreclosure deed

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and which are due and owing on the recording date (collectively, "taxes due and owing");

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provided, however, that a grantee shall not be deemed in violation of this subsection (b) if the

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grantee shall apply for a municipal lien certificate from the tax collector for the municipality

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during the forty-five (45) thirty (30) day period ending on the day on which the foreclosure deed

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is recorded and shall pay the taxes due and owing within thirty (30) days after the date on which

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the municipal lien certificate is mailed by the tax collector by the United States mail, postage

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prepaid, certified, return receipt requested, and addressed to the grantee at the address therefor set

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forth in the application for the municipal lien certificate. Taxes due and owing for purposes of

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this section shall include only installments thereof required by law to be paid as of the date the

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foreclosure deed is recorded.

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      (c) Upon a violation of any one or more of the requirements of this section, a penalty

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shall accrue at the rate of forty dollars ($40.00) per month one hundred dollars ($100) per day (in

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the aggregate) for each month or part thereof day during which such violation or violations

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continue. For purposes of determining the penalty due hereunder, a month commences on the day

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on which the first such violation occurs and a new month commences on the same day (or if there

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is no such day, then on the last day) of each succeeding calendar month until all taxes due and

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owing are paid. In the event of a violation of subsection (a), taxes due and owing shall be

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determined as of the date required thereunder for the recording of a foreclosure deed.

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      (d) As used in this section, the term "affiliate" shall mean, with respect to any

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mortgagee, any individual or legal entity that controls, is controlled by or is under common

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control with such mortgagee, and the term "foreclosure deed" shall mean the mortgagee's deed or

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other conveyance of title to the successful bidder at any sale by public auction made under and

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according to the provisions of any mortgage of real estate or any power of sale contained therein

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or annexed thereto.

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     (e) Any penalties under this section shall be paid to the municipality where the real estate

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is located and all outstanding penalties shall be paid at such time the foreclosure deed is recorded.

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A municipality may, by resolution, waive all or part of said penalties if extenuating

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circumstances, or mitigating factors, reasonably justify same.

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     SECTION 2. This act shall take effect August 1, 2012.

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LC01495

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

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     This act would require that foreclosure deeds be recorded within thirty (30) days of

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foreclosure and would increase the penalties for violation of this requirement.

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     This act would take effect August 1, 2012.

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LC01495

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