CHAPTER 34-25.2
Rhode Island Home Loan Protection Act

SECTION 34-25.2-7

§ 34-25.2-7. Assignee liability.

(a) Any person who purchases or is otherwise assigned a high-cost home loan shall be subject to all affirmative claims and any defenses with respect to the loan that the borrower could assert against the original creditor of the loan; provided, that this section shall not apply if the purchaser or assignee demonstrates by a preponderance of the evidence that it:

(1) Has in place at the time of the purchase or assignment of the subject loans, policies that expressly prohibit its purchase or acceptance of assignment of any high-cost home loans;

(2) Requires by contract that a seller or assignor of home loans to the purchaser or assignee represents and warrants to the purchaser or assignee that either: (a) the seller or assignor will not sell or assign any high-cost home loans to the purchaser or assignee; or (b) that such seller or assignor is a beneficiary of a representation and warranty from a previous seller or assignor to that effect; and

(3) Exercises reasonable due diligence at the time of purchase or assignment of high-cost home loans or within a reasonable period of time after the purchase or assignment of such high-cost home loans, intended by the purchaser or assignee to prevent the purchaser or assignee from purchasing or taking assignment of any high-cost home loans; provided, further, that reasonable due diligence shall provide for sampling and shall not require loan-by-loan review.

(b) In the event that a purchaser or assignee does not prevail under subsection (a), any recovery by a borrower, under this section, shall be limited to amounts required to reduce or extinguish the borrower's liability under the high-cost home loan plus amounts required to recover costs, including reasonable attorneys' fees. Any such claim asserted by a borrower against a subsequent holder or assignee of the high-cost home loan may be asserted by a borrower acting only in an individual capacity and must be asserted as follows:

(1) Within five (5) years of the closing of a high-cost home loan, a violation of this act in connection with the loan as an original action; and

(2) At any time during the term of a high-cost home loan, after an action to collect on the high-cost home loan or foreclose on the collateral securing the high-cost home loan has been initiated or the debt arising from the high-cost home loan has been accelerated or the high-cost home loan has become sixty (60) days in default, any defense, claim or counterclaim, or action to enjoin foreclosure or preserve or obtain possession of the home that secures the loan.

(c) The provisions of this section shall be effective notwithstanding any other provision of law; provided, that nothing in this section shall be construed to limit the substantive rights, remedies or procedural rights available to a borrower against any creditor, assignee or holder under any other law.

History of Section.
(P.L. 2006, ch. 569, § 1; P.L. 2006, ch. 573, § 1; P.L. 2007, ch. 54, § 1; P.L. 2007, ch. 67, § 1.)