Avoiding Liens Through Bankruptcy Narragansett RI

Title:
TITLE 5 Businesses and Professions

Chapter:
5-80 Mortgage Foreclosure Purchasers

Section:
TITLE 5 Businesses and Professions

§ 5-80-8  Prohibited practices. – A foreclosure purchaser shall not:

   (1) Enter into, or attempt to enter into, a foreclosure reconveyance with a foreclosed homeowner unless:

   (i) The foreclosure purchaser verifies and can demonstrate that the foreclosed homeowner has a reasonable ability to pay for the subsequent conveyance of an interest back to the foreclosed homeowner. In the case of a lease with an option to purchase, payment ability also included the reasonable ability to make the lease payments and purchase the property within the term of the option to purchase. There is a rebuttable presumption that a homeowner is reasonably able to pay for the subsequent conveyance if the owner's payments for primary housing expenses and regular principal and interest payments on other personal debt, on a monthly basis, do not exceed sixty percent (60%) of the owner's monthly gross income. For the purposes of this section, "primary housing expenses" means the sum of payments for regular principal, interest, rent, utilities, hazard insurance, real estate taxes, and association dues. There is a rebuttable presumption that the foreclosure purchaser has not verified reasonable payment ability if the foreclosure purchaser has not obtained documents other than a statement by the foreclosed homeowner of assets, liabilities, and income;

   (ii) The foreclosure purchaser and the foreclosed homeowner complete a closing for any foreclosure reconveyance in which the foreclosure purchaser obtains a deed or mortgage from a foreclosed homeowner. For purposes of this section, "closing" means an in-person meeting to complete final documents incident to the sale of the real property or creation of a mortgage on the real property conducted by a closing agent who is not employed by or an affiliate of the foreclosure purchaser;

   (iii) The foreclosure purchaser obtains the written consent of the foreclosed homeowner to a grant by the foreclosure purchaser of any interest in the property during such times as the foreclosed homeowner maintains any interest in the property; and

   (iv) The foreclosure purchaser complies with the requirements of the federal home Ownership Equity Protection Act, United States Code, title 15, § 1639, or its implementing regulation, Code of Federal Regulations, title 12, §§ 226.31 – 226.34, for any foreclosure reconveyance in which the foreclosed homeowner obtains a vendee interest in a contract for deed;

   (2) Fail to either;

   (i) Ensure that title to the subject dwelling has been reconveyed to the foreclosed homeowner; or

   (ii) Make a payment to the foreclosed homeowner such that the foreclosed homeowner has received consideration in an amount of at least eighty two percent (82%) of the fair market value of the property within one hundred fifty (150) days of either the eviction or voluntary relinquishment of possession of the dwelling by the foreclosed homeowner. The foreclosure purchaser shall make a detailed accounting of the basis for the payment amount, or a detailed accounting of the reasons for failure to make a payment, including providing written documentation of expenses, within this one hundred fifty (150) day period. The accounting shall be on a form prescribed by the department of attorney general, in consultation with the department of business regulation, without being subject to the rulemaking procedures of chapter 42-35. For purposes of this provision, the following applies:

   (A) There is a rebuttable presumption that an appraisal by a person licensed or certified by an agency of the federal government or this state to appraise real estate constitutes the fair market value of the property;

   (B) The time for determining the fair market value amount shall be determined in the foreclosure reconveyance contract