16 Jul Rhode Island Legislative Update
The Rhode Island legislature recently amended its laws governing notice of mediation conference prior to foreclosure proceedings, effective July 2, 2015. The legislature also amended its laws to prohibit military status discrimination as an unlawful housing practice, and amended its laws to specify prohibited acts or practices which may result from solicitations based upon information contained in a mortgage trigger lead, effective July 9, 2015.
HOUSE BILL 6264 AND SENATE BILL 581
The lender must, prior to initiation of foreclosure proceedings, provide the borrower with written notice that the lender may not foreclose on the mortgaged property without first participating in a mediation conference. A lender will not accrue any penalty if the required notice is mailed to the borrower:
- Within 60 days after the date upon which the loan is released from the protection of the automatic stay in a bankruptcy proceeding, or any similar injunctive order issued by a state or federal court;
- Within 60 days after a loan is no longer afforded protection under the Servicemember’s Civil Relief Act or similar state law; or
- Within 120 days of the date on which the borrower initially failed to comply with the terms of an eligible workout agreement.
Failure of the lender to comply with the above requirements will render the foreclosure voidable (formerly void) without limitation of the right of the lender thereafter to re-exercise its power of sale or other means of foreclosure upon compliance with the requirements.
The above requirements will not apply if:
- The mortgage is a reverse mortgage; or
- The date of default under the mortgage is on or before May 16, 2013.
HOUSE BILL 5593 AND SENATE BILL 241
“Armed Forces” means the Army, Navy, Marine Corps, Coast Guard, Merchant Marines, or Air Force of the United States and the Rhode Island National Guard.
“Military Status” means the military status of an individual as a veteran with an honorable discharge or an honorable or general administrative discharge or servicemember in the Armed Forces.
“Discriminate” now includes, among other things, to segregate, separate, or otherwise differentiate between or among individuals because of Military Status or because of the Military Status of any person with whom they are or may wish to be associated.
The right of all individuals in the State of Rhode Island to equal housing opportunities as a civil right has been extended to Military Status.
An owner having the right to sell, rent, lease, or manage a housing accommodation, or an agent of any of these, may not, directly or indirectly, take the following actions in regard to the Military Status of an individual or the Military Status of an individual with whom an individual is or may wish to be associated:
- Make or cause to be made any written or oral inquiry concerning such status;
- Refuse to sell, rent, lease, let, or otherwise deny to or withhold from any individual the housing accommodation because of such status;
- Issue any advertisement relating to the sale, rental, or lease of the housing accommodation which indicates any preference, limitation, specification, or discrimination based upon such status; or
- Discriminate against any individual because of such status in the terms, conditions, or privileges of the sale, rental, or lease of any housing accommodation or in the furnishing of facilities or services in connection with it.
The above provisions may not be construed to prohibit any oral or written inquiry as to whether the prospective purchaser or tenant is over the age of eighteen.
No person to whom application is made for a loan or other form of financial assistance for the acquisition, construction, rehabilitation, repair, or maintenance of any housing accommodation, whether secured or unsecured may directly or indirectly make or cause to be made any written or oral inquiry concerning Military Status; nor may any person to whom the application is made in the manner provided, directly or indirectly, discriminate in the terms, conditions, or privileges relating to the obtaining or use of any financial assistance against any applicant because of Military Status.
The above provisions should not be construed in any manner to prohibit or limit the exercise of the privilege of every person and the agent of any person having the right to sell, rent, lease, or manage a housing accommodation to establish standards and preferences and set terms, conditions, limitations, or specifications in the selling, renting, leasing, or letting thereof or in the furnishing of facilities or services in connection therewith which do not discriminate against the prospective purchaser, lessee, tenant, or occupant or any person with whom the individual is or may wish to be associated, on the basis of Military Status. The above provisions should also not be construed in any manner to prohibit or limit the exercise of the privilege of every person and the agent of any person making loans for or offering financial assistance in the acquisition, construction, rehabilitation, repair, or maintenance of housing accommodations to set standards and preferences, terms, conditions, limitations, or specifications for the granting of loans or financial assistance which do not discriminate on the basis of Military Status of the applicant for the loan or financial assistance or of any existing or prospective owner, lessee, tenant, or occupant of the housing accommodation.
No depository institution or any other credit granting commercial institution may discriminate in the granting or extension of any form of loan or credit, or the privilege or capacity to obtain any form of loan or credit, on the basis of the applicant’s Military Status and the form of loan and credit will not be limited to those concerned with housing accommodations, and the Rhode Island Commission for Human Rights must prevent any violation in the same manner as it prevents unlawful housing practices.
It is unlawful to deny any person who meets licensing and other non-discriminatory requirements which are also applied to other applicants and members access to or membership or participation in any real estate listing service, real estate brokers’ organization, or other service, organization, or facility relating to the business of selling, leasing, or renting a housing accommodation, or to discriminate against him or her in the terms or conditions of the access, membership, or participation, on account of Military Status.
It is an unlawful discriminatory housing practice for profit to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular Military Status.
It is unlawful for any person or other entity whose business includes engaging in residential real estate related transactions to discriminate against any person in making available a transaction, or in the terms and conditions of the transaction, because of Military Status.
A person engaged in the business of furnishing appraisals of real property may take into consideration factors other than Military Status.
The above requirements should be construed liberally for the accomplishment of the purposes intended and any provisions of any law inconsistent with such requirements will not apply. No provisions of any law of the State of Rhode Island prohibiting discrimination based on Military Status are repealed. The above provisions do not restrict the original jurisdiction of the courts to proceed with evictions as provided by law.
HOUSE BILL 5769 AND SENATE BILL 969
“Mortgage Trigger Lead” means a consumer report obtained where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. It does not include a consumer report obtained by a lender or servicer that holds or services existing indebtedness of the applicant who is the subject of the report.
With regard to a solicitation of a consumer for a residential mortgage loan, which solicitation is based, in whole or in part, on information contained in a Mortgage Trigger Lead, the following will be deemed to be a prohibited act or practice:
- The failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitor is not affiliated with the lender or broker with which the borrower initially applied;
- The failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitation is based on personal information about the borrower that was purchased, directly or indirectly, from a consumer reporting agency without the knowledge or permission of the lender or broker with which the borrower initially applied;
- The failure in the initial solicitation to comply with the provisions of the federal Fair Credit Reporting Act relating to prescreening solicitations that use consumer reports, including the requirement to make a firm offer of credit to the borrower; or
- Knowingly or negligently using information from a Mortgage Trigger Lead:
- To solicit consumers who have opted out of prescreened offers of credit under the federal Fair Credit Reporting Act; or
- To place telephone calls to consumers who have placed their contact information on a federal or state “do not call” list.
In addition to any other remedy provided by law, any lender or broker aggrieved by a prohibited act or practice may bring an action in the superior court in which venue the lender or broker has an office to enjoin a prohibited act or practice and recover damages. The court will award damages in the amount of actual damages or $1,000 per violation whichever is greater. In any successful action for injunctive relief or for damages, the court will award the lender or broker attorneys’ fees and costs, including court costs.
The Director of the Department of Business Regulation (“Director”) or the Director’s designee may adopt reasonable rules and regulations for the implementation of the above provisions.