2016 -- S 2646

========

LC004568

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

____________

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

     Introduced By: Senator Harold M. Metts

     Date Introduced: February 25, 2016

     Referred To: Senate Judiciary

     (Attorney General)

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) 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) 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 one hundred dollars ($100) per day (in

the aggregate) for each month day 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.

      (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.

     SECTION 2. Chapter 34-27 of the General Laws entitled "Mortgage Foreclosure and

Sale" is hereby amended by adding thereto the following section:

     34-27-8. Notice of intention to foreclose. – (a) A mortgagee that serves a notice of

intention to foreclose on a mortgage on residential property in this state pursuant to this chapter,

shall file in the land evidence records of the city or town in which the property is located a copy

of the notice at the same time that the mortgagee serves the notice on the mortgagor of the

property.

     (b) A mortgagee who is not a resident of this state shall designate and continuously

maintain an agent, who is a resident of this state, upon whom service may be made of any

process, notice, or demand required or permitted by law to be served. The mortgagee's

designation shall be in writing and it shall include the full name and address of the agent and the

street address of each property designated to said agent. The mortgagee's designation shall be

LC004568 - Page 2 of 4

filed in the land evidence records of the city or town in which the property is located.

     (c) A mortgagee in violation of this section shall be subject to a fine of up to one

thousand dollars ($1,000) per month in violation payable to the municipality.

     SECTION 3. This act shall take effect on September 1, 2016.

========

LC004568

========

LC004568 - Page 3 of 4

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

***

     This act would increase the fines for failing to file a foreclosure deed to one hundred

dollars ($100) per day. The act would also require mortgagees, upon serving a notice of intent to

foreclose against a mortgagor, to file a copy of that notice in the land evidence records of the city

or town in which the property is located and designate an agent for service of process within the

state.

     This act would take effect on September 1, 2016.

========

LC004568

========

LC004568 - Page 4 of 4