(a)  Every contract must be in writing and must fully disclose the exact nature of the foreclosure consultant’s services and the total amount and terms of compensation.

contract signature

Ask a real estate law question, get an answer ASAP!
Thousands of highly rated, verified real estate lawyers.
Specialties include: All Real Estate Law, Landlord and Tenant Law, Foreclosure, Homeowners' Association, Trespassing, Property Law, General Legal and more.
Click here to chat with a lawyer about your rights.

Terms Used In Rhode Island General Laws 5-79-3

  • Contract: A legal written agreement that becomes binding when signed.
  • 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). See Rhode Island General Laws 5-79-1
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • 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. See Rhode Island General Laws 5-79-1

  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • 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. See Rhode Island General Laws 5-79-1

(b)  The following notice, printed in at least fourteen (14) point boldface type and completed with the name of the foreclosure consultant, must be printed immediately above the statement required by subsection (c):

“NOTICE REQUIRED BY RHODE ISLAND LAW

(Name or anyone working for him or her CANNOT):

(1) Take any money from you or ask you for money until ………………………………… (Name) has completely finished doing everything he or she said he or she would do; and

(2) Ask you to sign or have you sign any lien, mortgage or deed.”

(c)  The contract must be written in the same language as principally used by the foreclosure consultant to describe his or her services or to negotiate the contract, must be dated and signed by the owner, and must contain in immediate proximity to the space reserved for the owner’s signature a conspicuous statement in a size equal to at least ten-point (10) boldface type, as follows:

“You, the owner, may cancel this transaction at any time prior to midnight of the third (3rd) business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”

(d)  The contract must contain on the first (1st) page, in a type size no smaller than that generally used in the body of the document, each of the following:

(1)  The name and address of the foreclosure consultant to which the notice of cancellation is to be mailed; and

(2)  The date the owner signed the contract.

(e)  The contract must be accompanied by a completed form in duplicate, captioned “notice of cancellation,” which must be attached to the contract, must be easily detachable, and must contain in at least ten-point (10) type the following statement written in the same language as used in the contract:

“NOTICE OF CANCELLATION

………………………………….. (Enter date of transaction)

You may cancel this transaction, without any penalty or obligation, until midnight of the third (3rd) business day from the above date.

To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice to ………………………………… (Name of foreclosure consultant) at …………………………………………………………….. (Address of foreclosure consultant’s place of business) NOT LATER THAN MIDNIGHT OF ………………………………….. (Date)

I hereby cancel this transaction ………………………………….. (Date)

………………………………… (Owner’s signature)”

(f)  The foreclosure consultant shall provide the owner with a copy of the contract and the attached notice of cancellation immediately upon execution of the contract.

(g)  The three (3) business days during which the owner may cancel the contract shall not begin to run until the foreclosure consultant has complied with this section.

History of Section.
P.L. 2006, ch. 242, § 1; P.L. 2006, ch. 287, § 1.