STATE HOUSE – The General Assembly today approved
legislation sponsored by Sen. Harold M. Metts and Rep. Mary Duffy Messier to
add five years to the life of an expiring law that keeps families in their
homes and avoids foreclosure.
The bill, which the sponsors submitted on behalf of Attorney
General Peter F. Kilmartin, extends a July 1 sunset provision in a 2013 law
that requires mortgage lenders to initiate and participate in mediation efforts
with homeowners facing foreclosure in an effort to prevent it. The bill moves
the sunset provision to July 1, 2023.
The sponsors said the law provides critical protection for
homeowners, requiring their lenders to make a good-faith effort with the help
of an independent mediator to try to come to an agreement to that helps save
their homes from foreclosure.
“Foreclosure devastates families and neighborhoods.
Mediation helps people find ways they can save their homes and all that they’ve
invested in them. Rhode Island and our communities were hit very hard by the
foreclosure crisis, and this act made a real difference in stemming that tide
and preserving families’ homes. While I hope to see this provision made
permanent, extending it for another five years will help many more Rhode
Islanders avoid foreclosure, stabilizing their families and neighborhoods,”
said Senator Harold M. Metts (D-Dist. 6, Providence).
According to RIHousing, which administers the program, over
70 percent of homeowners who have taken advantage of the opportunity for
mediation are able to reach an agreement that allows them to stay in their
“This law has been a lifeline for so many families who were
on the brink of losing their homes. Mediation is in the best interest of all
parties, because it keeps people in their homes, paying their mortgages at a
rate they can afford. The value of this law to Rhode Island, our residents and
our communities has been well demonstrated, and it should be extended,” said
Representative Duffy Messier (D-Dist. 62, Pawtucket).
While not all eligible homeowners participate in the
mediation process, those that do are often able to remain in their home. Since
the act became law in 2013, 990 homeowners have sought mediation. Of those
that complete the process, approximately 50 percent resulted in homeowners
receiving a loan workout from their mortgage provider, with another 24 percent
ending without the mortgage provider receiving certification needed to proceed
“The Foreclosure Mediation Act has proved to be successful
in keeping many Rhode Islanders in their homes, and while the economy has
improved and the housing market is once again strong, Rhode Island is still
13th in the country in the percentage of loans in foreclosure. The impetus for
the original passage of this bill was the foreclosure crisis but good public
policy — and this is good public policy — shouldn’t only exist during times of
crisis. Their true purpose is to help stave off crises,” said Attorney General
Before the law took effect, Rhode Island had one of the
least restrictive foreclosure procedures in the country. Lenders were merely
required to provide notice to the homeowner of their intent to initiate
foreclosure, and public notice of the foreclosure in the newspaper. There was
no required court involvement and no requirement that lenders meet with
borrowers to explore alternatives to foreclosure.
At the time, homeowners across the state were
struggling with unemployment or underemployment, and with few protections in
place, many lost their homes to foreclosure. Those foreclosures had a
devastating impact, not only on families who lost their homes, but also on the
greater community. Foreclosed properties often mean increased crime,
declining property values and reduced quality of life for all