Rhode Island § 5-79-1 - Mortgage Foreclosure Consultant Regulation

§ 5-79-1. Definitions.

As used in this chapter:

(1) “Contract” means any agreement, or any term in any agreement, between a foreclosure consultant and an owner for the rendition of any services as defined in subsection (8).

(2) “Foreclosure consultant” means any person who, directly or indirectly, makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service that the person in any manner represents will in any manner do any of the following:

(i) Stop or postpone the foreclosure sale;

(ii) Obtain any forbearance from any beneficiary or mortgagee;

(iii) Assist the owner to exercise the right of redemption provided in § 34-23-2;

(iv) Obtain any extension of the period within which the owner may reinstate the owner’s obligation;

(v) Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;

(vi) Assist the owner in foreclosure or loan default to obtain a loan or advance of funds;

(vii) Avoid or ameliorate the impairment of the owner’s credit resulting from the recording of a notice of default or the conduct of a foreclosure sale; or

(viii) Save the owner’s residence from foreclosure.

(3) A foreclosure consultant does not include any of the following:

(i) A person licensed to practice law in this state when the person renders service in the course of his or her practice as an attorney-at-law;

(ii) A person licensed as a credit counselor under chapter 19-14.7 when the person is acting as a credit counselor in accordance with the chapter;

(iii) A person licensed as a real estate broker or salesperson under chapter 20.5 of this title when the person engages in acts whose performance requires licensure under that chapter;

(iv) A person licensed as an accountant under chapter 3.1 of this title when the person is acting in any capacity for which the person is licensed under those provisions;

(v) A person or the person’s authorized agent acting under the express authority or written approval of the department of housing and urban development or other department or agency of the United States or this state to provide services;

(vi) A person who holds or is owed an obligation secured by a lien on any residence in foreclosure when the person performs services in connection with this obligation or lien and the obligation or lien did not arise as the result of or as part of a proposed foreclosure reconveyance;

(vii) Any person or entity doing business under any law of this state or of the United States relating to banks, trust companies, savings and loan associations, industrial loan and thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee that is a United States Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or employee of these persons or entities while engaged in the business of these persons or entities;

(viii) A person licensed as a residential mortgage originator or servicer pursuant to chapter 14 of title 19, when acting under the authority of that license or a foreclosure purchaser as defined in § 5-79-10;

(ix) A nonprofit agency or organization that offers counseling or advice to an owner of a home in foreclosure or loan default if they do not contract for services with for-profit lenders or foreclosure purchasers; and

(x) A judgment creditor of the owner, to the extent that the judgment creditor’s claim accrued prior to the personal service of the foreclosure notice required by § 34-27-4, but excluding a person who purchased the claim after such personal service.

(4) “Foreclosure reconveyance” means a transaction involving:

(i) The transfer of title to real property by a foreclosed homeowner during a foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or by creation of a mortgage or lien or encumbrance during the foreclosure process that allows the acquirer to obtain title to the property by redeeming the property as a junior lienholder; and

(ii) The subsequent conveyance, or promise of a subsequent conveyance, of an interest back to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer that allows the foreclosed homeowner to possess the real property following the completion of the foreclosure proceeding, which interest includes, but is not limited to, an interest in a contract for deed, purchase agreement, option to purchase, or lease.

(5) “Owner” means the record owner of the residential real property in foreclosure at the time the notice of pendency was recorded, or the summons and complaint served.

(6) “Person” means any individual, partnership, corporation, limited-liability company, association, or other group, however organized.

(7) “Residence in foreclosure” means residential real property consisting of one to four (4) family dwelling units, one of which the owner occupies as his or her principal place of residence, and against which there is an outstanding notice of pendency of foreclosure, pursuant to § 34-27-4, or against which a summons and complaint has been served under § 34-27-1.

(8) “Service” means and includes, but is not limited to, any of the following activities:

(i) Debt, budget, or financial counseling of any type;

(ii) Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a lien on a residence in foreclosure;

(iii) Contacting creditors on behalf of an owner of a residence in foreclosure;

(iv) Arranging or attempting to arrange for an extension of the period within which the owner of a residence in foreclosure may cure the owner’s default and reinstate his or her obligation pursuant to § 34-23-3;

(v) Arranging or attempting to arrange for any delay or postponements of the time of sale of the residence in foreclosure;

(vi) Advising the filing of any document or assisting in any manner in the preparation of any document for filing with any bankruptcy court; or

(vii) Giving any advice, explanation, or instruction to an owner of a residence in foreclosure, that in any manner relates to the cure of a default in, or the reinstatement of, an obligation secured by a lien of the residence in foreclosure, the full satisfaction of that obligation, or the postponement or avoidance of a sale of a residence in foreclosure, pursuant to a power of sale contained in any mortgage.