Rhode Island foreclosure laws: how the process works and how long it takes

• R.I. Gen. Laws § 34-27-1 et seq.: Primary framework for non-judicial foreclosure by power of sale. Governs the notice requirements, publication, sale procedures, and rights of the parties.
• R.I. Gen. Laws § 34-25.2-1 et seq.: Consumer protection law governing high-cost home loans. Requires additional disclosures and restrictions on predatory lending practices. Provides borrower protections and potential defenses to foreclosure for covered loans.
• R.I. Gen. Laws § 34-27-9: Before a power-of-sale foreclosure of an individual consumer first-lien mortgage on an owner-occupied, one- to four-unit primary residence, the lender must send written notice that it may not foreclose without first participating in a mediation conference run by a HUD-approved counseling agency. Reinstated in 2024 from former § 34-27-3.2.
• R.I. Gen. Laws § 34-27-4: Governs the publication and mailing requirements for notice of foreclosure sale. Requires publication in a newspaper once a week for 3 successive weeks (the last publication at least 7 days before sale). Mailing to borrower required.
• R.I. Gen. Laws § 9-26-4.1: Establishes a $500,000 homestead exemption protecting equity in the primary residence from judgment creditors. Does not protect against mortgage foreclosure.
• R.I. Gen. Laws § 5-79-1 et seq.: Regulates foreclosure rescue consultants. Requires a written contract that discloses the consultant's services and fees, lets the owner cancel until midnight of the third business day after signing, bars the consultant from collecting fees before finishing its services, acquiring an interest in the home, or taking a power of attorney except to inspect documents as provided by law, and sets criminal penalties for violations.

After the foreclosure sale (no redemption period), the purchaser may seek eviction through the District Court if the former owner does not leave voluntarily. A foreclosing owner can evict anyone other than a tenant by following the procedure for ending a month-to-month tenancy (R.I. Gen. Laws § 34-18-37), and many foreclosing owners can evict tenants only for just cause or in a few other listed situations (§ 34-18-38.2). The federal Protecting Tenants at Foreclosure Act generally requires 90 days' notice before evicting bona fide tenants.

Under the statutory power of sale, the lender keeps from the sale proceeds the sums the mortgage secures, with interest, sale expenses, attorney fees and costs, and any taxes, assessments and insurance premiums, and must pay any surplus to the former owner with an account of the sale. The statute does not itself say how claims to the surplus by other lienholders are handled.

Generally first in time, first in right under Rhode Island recording statutes. Property tax liens have priority over all other liens including first mortgages. Municipal tax lien foreclosure is available.

Rhode Island's mortgage-specific limit (R.I. Gen. Laws § 34-26-7) bars exercising a power of sale or starting a foreclosure on most mortgages after 35 years from the mortgage's recording or, if the mortgage states a term or maturity date, five years after that date, unless an extension or the lender's affidavit that the mortgage is unpaid is recorded first. Separately, a suit to enforce a note payable at a definite time generally must be brought within six years after the due date or accelerated due date (§ 6A-3-118(a)), and other civil actions generally within ten years (§ 9-1-13(a)). Consult a local attorney. No specific statute identified for deficiency judgment actions. A suit to enforce a note payable at a definite time generally must be brought within six years after the due date or, if the loan was accelerated, the accelerated due date (R.I. Gen. Laws § 6A-3-118(a)). Consult a local attorney.

Rhode Island law gives no general right to reinstate a mortgage, so whether an executor can reinstate the loan depends on the mortgage terms. Before the sale, the borrower's heirs, executors or administrators can redeem the property by paying the money borrowed, with interest (R.I. Gen. Laws § 34-23-2).

• Unpaid property taxes: Property tax liens have priority over mortgage liens in Rhode Island. Municipalities can sell tax liens at tax sale. The buyer's deed is subject to the owner's right of redemption, which does not end automatically: after one year from the tax sale, the tax title holder may petition the superior court to foreclose all rights of redemption (after five years if RIHousing acquired the title). Contact the municipal tax collector for specific procedures. Rhode Island's high property taxes make tax lien foreclosure a real risk.

$500,000. Protects up to $500,000 of equity in your primary residence from many judgment creditors, with exceptions that include mortgage debt and debts owed to a federally insured deposit-taking institution or a person regulated or licensed under title 19. Does not stop mortgage foreclosure. Rhode Island's $500,000 homestead exemption (R.I. Gen. Laws § 9-26-4.1) protects up to $500,000 of equity. It does not apply to a debt secured by a mortgage on the home, a debt contracted to buy the home, or a debt owed to a federally insured deposit-taking institution or a person regulated or licensed under title 19, so it usually does not protect against a lender's claim for a balance left after foreclosure. The exemption was raised from $300,000 to $500,000 in 2012.

Rhode Island law adds protections for servicemembers (R.I. Gen. Laws § 34-27-4(c), (d)). For a mortgage taken out before military service, if a servicemember tells the lender in writing that they are on active duty or deployment, or received the sale notice within nine months after it ended, the lender is barred from going ahead with the sale until that nine-month period has passed or a court approves it. The mailed notice of sale must explain these rights. Federal SCRA generally bars foreclosure on a pre-service mortgage without a court order while on active duty and for 12 months afterward, and a servicemember can ask for a 6% interest rate cap. Rhode Island has Naval Station Newport (a major military installation) and the Rhode Island National Guard. Service members should contact their legal assistance office.

Rhode Island's state income tax means post-foreclosure tax liability can be higher than in no-income-tax states.