Senate Bill #388 (2017)

AN ACT RELATING TO PROPERTY - MORTGAGE FORECLOSURE

Imposes a penalty of $300 per month up to an aggregate total of $2,000 upon financial institutions failing to promptly record foreclosure deeds and pay outstanding taxes. Most holders of a private mortgage would be exempt from the penalty requirements.

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Changes since original draft

  • 2017 – S 0388
  • 2017 – S 0388 SUBSTITUTE A
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  • LC001760
  • LC001760/SUB A
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  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2017
  • ____________
  • A N A C T
  • RELATING TO PROPERTY - MORTGAGE FORECLOSURE
  • S T A T E O F R H O D E I S L A N D
  • 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 GeneralAssembly as follows:
  • 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 anaffiliate of the mortgagee is the successfulbidder for the realestate or property offered for sale, the foreclosure deed shallbe 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, alltaxes 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, returnreceipt requested,and addressedto 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"shallmean, 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"shallmean 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 shalltake effect upon passage.
  • (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) three hundred dollars ($300) 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. The maximum aggregate penalty shall not exceed two thousand dollars ($2,000), which shall be paid prior to the city or town clerk accepting the foreclosure deed for recording.
  • (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.
  • (e) A mortgagee not licensed as a financial lending institution holding a mortgage by private agreement with another party shall be exempt from the penalty requirements of this section.
  • SECTION 2. This act shall take effect upon passage.
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  • LC001760
  • LC001760/SUB A
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  • LC001760 - Page 2of 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 3of 3
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO PROPERTY - MORTGAGE FORECLOSURE
  • ***
  • This act would impose a penalty of three hundred dollars ($300) per month up to an aggregate total of two thousand dollars ($2,000) upon financial institutions failing to promptly record foreclosure deeds and pay outstanding taxes. Most holders of a private mortgage would be exempt from the penalty requirements.
  • This act would take effect upon passage. ======== LC001760/SUB A ========

Votes

NOTE: Electronic voting records are unofficial and may not be accurate. For an official vote tally, check the House or Senate Journal from the day of the vote.

Floor vote for Passage

June 22, 2017 at 5:28pm
Yeas: 33 / Nays: 0 / Not voting: 2 / Recused: 2
Legislator Vote
Sen. Algiere R
Sen. Archambault Y
Sen. Calkin Y
Sen. Ciccone Y
Sen. Conley Y
Sen. Cote Y
Sen. Coyne Y
Sen. Crowley Y
Sen. DaPonte Y
Sen. DiPalma Y
Sen. Doyle NV
Sen. Felag Y
Sen. Fogarty Y
Sen. Gallo Y
Sen. Gee Y
Sen. Goldin Y
Sen. Goodwin Y
Sen. Jabour Y
Sen. Kettle Y
Sen. Lombardi Y
Sen. Lombardo Y
Sen. Lynch Prata Y
Sen. McCaffrey NV
Sen. Metts Y
Sen. Miller Y
Sen. Morgan Y
Sen. Nesselbush Y
Sen. Paolino Y
Sen. Pearson R
Sen. Picard Y
Sen. Quezada Y
Sen. Raptakis Y
Sen. Ruggerio Y
Sen. Satchell Y
Sen. Seveney Y
Sen. Sheehan Y
Sen. Sosnowski Y

Floor vote for PASSAGE IN CONCURRENCE

June 27, 2017 at 5:40pm
Yeas: 70 / Nays: 0 / Not voting: 5 / Recused: 0
Legislator Vote
Rep. Abney Y
Rep. Ackerman Y
Rep. Ajello Y
Rep. Almeida Y
Rep. Amore Y
Rep. Azzinaro Y
Rep. Barros Y
Rep. Bennett Y
Rep. Blazejewski Y
Rep. Canario Y
Rep. Carson Y
Rep. Casey Y
Rep. Casimiro Y
Rep. Chippendale Y
Rep. Corvese Y
Rep. Costantino NV
Rep. Coughlin Y
Rep. Craven Y
Rep. Cunha Y
Rep. Diaz NV
Rep. Donovan Y
Rep. Edwards Y
Rep. Fellela Y
Rep. Filippi Y
Rep. Fogarty Y
Rep. Giarrusso Y
Rep. Handy Y
Rep. Hearn Y
Rep. Hull Y
Rep. Jacquard Y
Rep. Johnston Y
Rep. Kazarian NV
Rep. Keable Y
Rep. Kennedy Y
Rep. Knight Y
Rep. Lancia Y
Rep. Lima Y
Rep. Lombardi Y
Rep. Maldonado Y
Rep. Marshall Y
Rep. Marszalkowski Y
Rep. Mattiello Y
Rep. McEntee Y
Rep. McKiernan Y
Rep. McLaughlin Y
Rep. McNamara Y
Rep. Mendonca Y
Rep. Messier Y
Rep. Morgan Y
Rep. Morin Y
Rep. Nardolillo Y
Rep. Newberry Y
Rep. Nunes Y
Rep. O'Brien NV
Rep. O'Grady Y
Rep. Perez Y
Rep. Phillips NV
Rep. Price Y
Rep. Quattrocchi Y
Rep. Ranglin-Vassell Y
Rep. Regunberg Y
Rep. Roberts Y
Rep. Ruggiero Y
Rep. Serpa Y
Rep. Shanley Y
Rep. Shekarchi Y
Rep. Slater Y
Rep. Solomon Y
Rep. Tanzi Y
Rep. Tobon Y
Rep. Ucci Y
Rep. Vella-Wilkinson Y
Rep. Walsh Y
Rep. Williams Y
Rep. Winfield Y