Lender Representation on Foreclosures Throughout Rhode Island, Massachusetts, and Connecticut
PALUMBO LAW provides foreclosure services throughout the state of Rhode Island through lender representation.
We represent lenders only.
We do not offer foreclosure defense services.
PALUMBO LAW provides services throughout the state of Rhode Island and can meet with a bank representative to discuss the case and potential strategies, timelines, and costs. Rhode Island homeowners behind on mortgage payments will most likely lose their property to foreclosure, eventually. Note though that under federal law, the bank must generally delay the foreclosure start for 120 days after the borrower becomes delinquent on the loan. Most lenders will not send a notice of default until the borrower is 90 days past due (three consecutive missed payments). As a result, many times a borrower can fall behind a month or two without facing foreclosure.
The initial steps involved in the pre-foreclosure proceedings are as follows:
Notice of Default and Intent to Foreclose
The lender of the loan has to inform the borrower in writing about loss mitigation options that might be available and appoint personnel to help the borrower try to work out a way to avoid foreclosure. Foreclosure law in Rhode Island also ensures that the lender informs of its intent to foreclose well in advance. You must get your first notice a full 45 days before the lawsuit can be filed. This is commonly referred to in Rhode Island as a “breach letter,” informing you that the loan is in default before the lender can accelerate the loan. The breach letter gives the borrower a chance to cure the default and avoid foreclosure. Our office will prepare and send the required notice of default to the borrower in compliance with Rhode Island law and the terms of the mortgage agreement.
Loan Modification and Mediation
Depending on the circumstances, there may be requirements to attempt to modify the terms of the loan or to engage in mediation before proceeding with foreclosure.
Right to Cure
In some cases, the borrower may have the right to cure the default and stop the foreclosure process within a certain period by paying the defaulted amount plus any additional fees.
Steps to Initiate Foreclosure
Embarking on the foreclosure process can be a complex and nuanced journey, especially in Rhode Island. Whether you are a lender or a borrower, understanding the steps involved in initiating foreclosure is crucial. Below, we outline the key stages in both judicial and non-judicial foreclosures, providing insight into each phase of the process.
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Judicial Foreclosure: Rhode Island allows both judicial and non-judicial foreclosure, although judicial foreclosure is less common, especially for commercial properties. In a judicial foreclosure, the lender must file a lawsuit to obtain a court order to foreclose.
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Non-Judicial Foreclosure: More commonly, commercial mortgages may have a “power of sale” clause that allows the lender to conduct a non-judicial foreclosure. In this case, the lender follows specific procedures laid out in the mortgage contract and state law, which may include notifying the borrower and publicizing the upcoming foreclosure sale.
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Auction: After the notice period has expired, the property is usually sold at a public auction. The highest bidder wins the property and pays the bid amount to the lender.
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Deficiency Judgment: If the sale does not cover the remaining mortgage balance, the lender may be able to obtain a deficiency judgment against the borrower for the remaining amount.
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Redemption Period: Rhode Island law does not typically offer a redemption period for non-judicial foreclosures once the sale has occurred, unlike some states that offer this option for residential properties. In certain types of judicial foreclosures, a right of redemption may be allowed for a period of up to three years. However, this is not common in Rhode Island.
Navigating the foreclosure process in Rhode Island requires a thorough understanding of the legal procedures and potential outcomes. From judicial to non-judicial foreclosures, each step carries significant implications for all parties involved.
Non-Judicial Foreclosure Actions: Comprehensive Steps and Documentation
The non-judicial foreclosure process involves various critical steps and preparation of essential documents. Our experienced attorneys, focusing on Rhode Island real estate and mortgage foreclosure law, will guide you through each phase, ensuring legal compliance and efficiency. Here’s what you can expect:
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- Initial Consultation with an Attorney: Given the intricacies of foreclosure, consulting an attorney with expertise in Rhode Island real estate and mortgage foreclosure law is imperative.
- Preparation and Evaluation:
- Conducting appraisals of real estate, if required or requested.
- Obtaining a broker’s price opinion, as necessary.
- Performing a comprehensive title, bankruptcy, federal tax lien, and judicial records search within 24 hours of receiving a referral.
- Notices and Communications:
- Drafting and serving any necessary notices of acceleration in line with the contract terms between the lender and borrower.
- Preparing and dispatching the Notice of Non-Judicial Foreclosure Sale.
- Handling borrower inquiries related to negotiations on reinstatements, payoffs, or forbearance plans.
- Document Preparation:
- Preparing all supporting foreclosure documentation, including demand letters, notices, advertisements for newspapers, memos of sale, etc.
- Furnishing reports in formats specified by you and providing copies of essential documents.
- Auction and Sale Execution:
- Obtaining a writ of possession if required to gain control of the property.
- Conducting the non-judicial auction/sale, adhering to your bidding instructions and legal requirements.
- Reporting foreclosure sale results promptly by the end of the sale day.
- Post-Sale Processes:
- Preparing and recording all post-sale documents in the real property records of the relevant city or town.
- Preparing and submitting title packages to HUD/VA following their guidelines.
- Assisting in resolving any post-foreclosure title issues.
- Final Steps:
- Considering the pursuit of a deficiency judgment against the borrower, if applicable.
- Providing a detailed final accounting statement to the bank, outlining the sale proceeds and associated costs.
Rhode Island Commercial Mortgage Foreclosures
Commercial foreclosures can be quite complex and involve the rights of tenants, assignments of rents, UCC liens on equipment, furniture, etc. Collection of guaranties and recovery of other forms of collateral are also usually involved. Frequently, these matters are litigated in state court and/or in bankruptcy proceedings.
How PALUMBO LAW Firm Can Help
PALUMBO LAW in Rhode Island is experienced and successful in dealing with residential and commercial foreclosures and will proceed aggressively to recover the collateral, obtain payment, or restructure the loan. Our Rhode Island firm is also experienced with maximizing recovery through various forms of creative settlement. Contact our Rhode Island lender representation attorney today for an evaluation of your case.
