Rhode Island General Laws 5-79-4. Violations
It is a violation for a foreclosure consultant to:
(1) Claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented he or she would perform;
(2) Claim, demand, charge, collect, or receive any fee, interest, or any other compensation for any reason that exceeds eight percent (8%) per annum of the amount of any loan that the foreclosure consultant may make to the owner;
(3) Take any wage assignment, any lien on any type of real or personal property, or other security to secure the payment of compensation. Any such security is void and unenforceable;
(4) Receive any consideration from any third-party in connection with services rendered to an owner unless the consideration is first fully disclosed to the owner;
(5) Acquire any interest, directly or indirectly, or by means of a subsidiary or affiliate, in a residence in foreclosure from an owner with whom the foreclosure consultant has contracted;
(6) Take any power of attorney from an owner for any purpose, except to inspect documents as provided by law; or
(7) Induce or attempt to induce any owner to enter a contract that does not comply in all respects with § 5-79-3.
History of Section.
P.L. 2006, ch. 242, § 1; P.L. 2006, ch. 287, § 1.
Terms Used In Rhode Island General Laws 5-79-4
- 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
- Lien: A claim against real or personal property in satisfaction of a debt.
- 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
- Personal property: All property that is not real property.
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- 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. See Rhode Island General Laws 5-79-1
- 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. See Rhode Island General Laws 5-79-1