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:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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foreclosure deed is recorded.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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or annexed thereto.

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

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

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section.

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     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

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foreclosure deeds and pay outstanding taxes.

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     This act would take effect upon passage.

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