Sec. 4-431. - Foreclosure requirements for owner-occupied residential properties.

(a)

Definitions. [The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:]

(1)

The city shall mean the City of East Providence, Rhode Island.

(2)

Residential premises/property shall mean real property that is owner-occupied as an owner's principal residence, located within the City of East Providence, that is either a single-family [unit] or a structure containing not more than four residential units, and shall also include a residential condominium unit or a residential co-op unit occupied by an owner as an owner's principal residence.

(3)

Loan/mortgage conciliation conference coordinator shall mean an individual employed by a HUD-approved independent counseling agency to facilitate the discussion between the homeowner/mortgagor and the lender/mortgagee.

(4)

Loan/mortgage conciliation conference shall mean the formal discussion and negotiation taking place at the call of the loan/mortgage conciliation conference coordinator between the homeowner/mortgagor and the lender/mortgagee.

(5)

Homeowner shall mean an individual who owns and resides in residential real property located in the City of East Providence, and for whom such residential real property is a principal residence.

(6)

Lender shall mean an entity which has advanced funds secured by a mortgage on residential premises, and recorded in the land evidence records of the city.

(7)

The parties shall mean the homeowner/mortgagor and the lender/mortgagee.

(8)

Rules and regulations shall mean any rules adopted by the city necessary for the proper enforcement of this article to interpret and secure its intent.

(b)

Statement of policy. It is hereby declared that residential mortgage foreclosure actions, caused in part by so-called sub-prime mortgage lending and predatory lending practices as well as unemployment and underemployment, have negatively impacted a substantial number of homeowners in the city. Increasing numbers of foreclosures lead to increases in unoccupied and unattended buildings in the city and cause the unnecessary and unwanted displacement of homeowners and tenants who desire to live in the City of East Providence.

(c)

Purpose. The purpose of this article is to protect the public by providing early, HUD-approved independent counseling agency supervised intervention in residential owner-occupied mortgage foreclosure cases which will assure timely determination of eligibility under various federal, state and local programs established to facilitate loan work-out and other solutions to permit residential homeowners, where possible, to retain their properties and permit lenders to move forward to auction/sale of the properties and recordation of a foreclosure deed upon conclusion of the process.

(d)

Notice of foreclosure to the city. From and after the effective date of this article, a lender/mortgagee shall provide written notice to the city of its intent to foreclose on the subject residential property at the same time it issues notice to the homeowner/mortgagor of the foreclosure action. Such notice must include plat and lot information, and said notice shall be filed by the lender/mortgagee with the city clerk.

(e)

Conciliation conference between the parties. Following the filing of such notice, the parties shall participate in a mandatory loan/mortgage conciliation conference at a location mutually convenient to the parties, the following manner, and provided that telephone participation by the lender/mortgagee is acceptable.

(1)

Said conciliation conference shall be scheduled at a time and place to be determined by the conciliation conference coordinator, but not later than 21 days following the mailing of the notice of intent to foreclose. The parties will be noticed by certified and first class mail.

(2)

Prior to the scheduled conciliation conference, the homeowner/mortgagor will be assigned a loan counselor to be provided by a HUD-approved independent counseling agency.

(3)

The homeowner/mortgagor shall cooperate in all respects with the housing counseling agency, providing all necessary financial and employment information. The homeowner/mortgagor shall complete any and all loan resolution proposals and applications as appropriate.

(4)

The conciliation conference will require the exchange of information provided as required by subsection (6) to the representative of the lender/mortgagee.

(5)

If after two attempts by the conciliation conference coordinator to contact the homeowner/mortgagor, the homeowner/mortgagor fails to respond to the conference coordinator's request to appear for the conciliation conference, or the homeowners/mortgagor fails to cooperate in any respect with the requirements outlined in this article, the requirements of the ordinance will be deemed to be satisfied upon verification by the HUD-approved independent counseling agency that the required notice was sent; and if so, a certificate will be issued immediately by the HUD-approved independent counseling agency authorizing the lender/mortgagee to proceed with the foreclosure action including recording the foreclosure deed.

(6)

If it is determined after a good faith effort made by the lender/mortgagee at the conciliation conference with the homeowner/mortgagor that the parties cannot come to an agreement to renegotiate the terms of the loan in an effort to avoid foreclosure, such good faith effort on behalf of the lender/mortgagee shall be deemed to satisfy the requirements of this article. A certificate certifying such good faith effort will be issued immediately by the HUD-approved independent counseling agency authorizing the lender/mortgagee to proceed with the foreclosure action to include recording the deed. Such a certification will be in the form of a document to be filed along with all other relevant documents with the city clerk.

(7)

The parties shall complete the process required by this article within a period of 45 days from the initial notice provided in (1).

(8)

Cases involving premises which are not owner-occupied or which are not residential are not subject to the mandatory loan/mortgagee conciliation conference and may proceed directly to foreclosure and recordation of the deed concerning such property, presuming compliance with section 4-432.

(9)

Notwithstanding the foregoing, any lender/mortgagee which is headquartered within the State of Rhode Island and which services its own mortgages shall be deemed in compliance with the requirements of this section of:

a.

The lender/mortgagee provides homeowners forbearance relief requirements applicable to FHA-Insured Mortgages, as set forth in Chapter 8 of the HUD Handbook 4.330.1 Rev. 5, Administration of Insured Home Mortgages, as the same may be amended from time to time; and

b.

The deed offered by a lender/mortgagee to be filed with the city clerk as a result of a mortgage foreclosure action contains a certification that the provisions of this subsection have been satisfied.

(e)

Penalties. A deed offered by a lender/mortgagee to be filed with the city clerk shall contain a statement that the requirements of this article have been met by the lender/mortgagee.

(Ch. 556, § I, 5-1-12)