Non-judicial foreclosure has become more common in the state of Rhode Island in recent times, whereas in the past these were primarily conducted by judicial means only. The state is still a lien theory state, but it has been found with the amount of foreclosures taking place that it is more efficient and economical to make use of the non-judicial process. Lenders regularly make use of repossession actions such as eviction and deed in lieu of foreclosure. With a mortgage loan the property provides the security for the underlying loan, and the terms of repayment are set out in this agreement.
In most instances the lender is required to go to court for the judicial foreclosure to take place. Once the court has issued a final judgment of foreclosure, the property is repossessed and sold at a public auction. A certificate of possession is issued before witnesses and the lender or the highest bidder becomes the new owner of the property.
While this process is very dependent upon how busy the courts are they are generally affected very quickly and it takes about 60 – 80 days to finalize. Of course this is only in the case of an uncontested foreclosure if the matter is contested it can take much longer. In Rhode Island only 21 days is required in terms of pre-sale notice.
Generally no rights of redemption apply to Rhode Island foreclosures once the sale has taken place. However prior to the ale the borrower may reclaim the property if they are able to pay the full amount of the unpaid loan and court as well as other costs. In certain actions rights of redemption may be allowed for up to 3 years, which are the longest rights of redemption allowed in any state. Deficiency judgments are permitted.