2015 -- H 5191

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LC000638

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE

     Introduced By: Representatives Morin, Casey, Carson, Blazejewski, and Barros

     Date Introduced: January 21, 2015

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 34-27-6 of the General Laws in Chapter 34-27 entitled "Mortgage

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

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

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

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

the successful bidder for the real estate or property offered for sale, the foreclosure deed shall be

recorded in the records of land evidence for the municipality where the real estate is located

within forty-five (45) thirty (30) days after the date of the sale. The deed shall be captioned

"foreclosure deed" and the date of the foreclosure shall be stated in the deed. This subsection (a)

shall not apply to any such sale if, prior to the recording of the foreclosure deed: (1) the

mortgagor files a voluntary proceeding, or an order for relief is entered in any involuntary

proceeding against the mortgagor, under any federal or state bankruptcy or insolvency statute; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

foreclosure deed is recorded.

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

shall accrue at the rate of forty dollars ($40.00) per month (in the aggregate) for each month or

part thereof during which such violation or violations continue. For purposes of determining the

penalty due hereunder, a month commences on the day on which the first such violation occurs

and a new month commences on the same day (or if there is no such day, then on the last day) of

each succeeding calendar month until all taxes due and owing are paid. In the event of a violation

of subsection (a), taxes due and owing shall be determined as of the date required thereunder for

the recording of a foreclosure deed in the amount of two thousand dollars ($2,000) which shall be

paid prior to the city or town clerk accepting the foreclosure deed for recording.

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

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

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

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

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

or annexed thereto.

     (e) A mortgagee not licensed as a financial lending institution holding a mortgage by

private agreement with another party shall be exempt from the penalty requirements of this

section.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE

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     This act would impose a penalty upon financial institutions failing to promptly record

foreclosure deeds and pay outstanding taxes.

     This act would take effect upon passage.

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LC000638

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