2017 -- S 0388

========

LC001760

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE

     Introduced By: Senators Quezada, Calkin, Ciccone, Metts, and Goodwin

     Date Introduced: March 02, 2017

     Referred To: Senate 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) fifteen (15) 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) fifteen (15) 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) five hundred dollars ($500) 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.

     (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. This act shall take effect upon passage.

========

LC001760

========

LC001760 - Page 2 of 3

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE

***

     This act would reduce the time the buyer of mortgage foreclosed property has to record

the foreclosed deed from forty-five (45) to fifteen (15) days. It would also increase the penalty for

violation from forty dollars ($40.00) per month to five hundred dollars ($500) per month.

     This act would take effect upon passage.

========

LC001760

========

LC001760 - Page 3 of 3