The Rhode Island Department of Business Regulations is reformatting all of its current banking regulations in order to incorporate them into the Rhode Island Code of Regulations (RICR) and has adopted the Home Loan Protection Act and Mortgage Foreclosure Disclosure provisions.
The RICR is a uniform code of all regulations filed by Rhode Island’s state agencies, boards, and commissions under Rhode Island’s Administrative Procedures Act and was launched earlier this year. While reformatting for incorporation into the RICR, the Department made minor changes to Banking Regulation 3 and Banking Regulation 4 by renaming the provisions, deleting all footnotes, and removing appendices. Banking Regulation 3 is now the Home Loan Protection Act provision and Banking Regulation 5 is now the Mortgage Foreclosure Disclosure provision.
Both the Home Loan Protection Act and the Mortgage Foreclosure Disclosure provisions require that lenders provide borrowers with a number of disclosures. Under the Home Loan Protection Act provision, lenders must provide borrowers with a disclosure identifying prohibited practices under Rhode Island law within three business days of application and a net tangible benefit disclosure prior to closing of the loan. Lenders must also provide borrowers with a high-cost home loan disclosure for loans that are identified as high-cost as well as a flipping home loan disclosure if the borrower is refinancing a previous loan that was consummated within the prior sixty months.
Under the Mortgage Foreclosure Disclosure provision, mortgagors are to be given a notice of mediation to assist them in avoiding foreclosure. The provision also outlines the qualifications for the mediation coordinator responsible for issuing certificates of compliance. Additionally, if applicable, the provision requires a foreclosure notice be provided to tenants of homes that are in foreclosure informing them that the home is in foreclosure and that housing counseling services are available.
The new changes to the Home Loan Protection Act provision are effective October 18, 2018, and the changes to the Mortgage Foreclosure Disclosure provision are effective September 28, 2018. All appendices that were removed will be issued by Bulletin by the Department at a later date.