Rep. Felix bill extending
foreclosure protections passes House

STATE HOUSE – A bill sponsored by Rep. Leonela Felix that would help homeowners facing foreclosure passed the House today. The legislation preserves the process established by the 2013 Foreclosure Mediation Act.

“I know how devastating foreclosures can be for families and communities firsthand. When I was a kid, my mom got seriously sick and had to stop working for a while. She fell behind on payments and the bank refused to work with her,” said Representative Felix (D-Dist. 61, Pawtucket). “If we had had this program back then, we could have gotten on a payment plan we could afford and stayed in our home. This program has given other families security we didn’t have. It works and we should keep it going.”

Before 2013, the foreclosure processes in Rhode Island had relatively few restrictions. The Foreclosure Mediation Act requires lenders to advise owner-occupant mortgagors of the availability of a “mortgage mediation process” before the lender could proceed to foreclosure. If a homeowner requests mediation, the lender is required to participate in good faith and cannot proceed to foreclosure until a mediation coordinator issues a certificate affirming that the lender has complied with the law.

Advocates say the law is working. According to RI Housing, over 1,500 homeowners have participated in foreclosure mediation conferences over the past ten years. About 46% of completed mediations have resulted in the homeowner avoiding foreclosure through a loan modification, reinstatement or acceptable repayment plan.

The program was originally slated to end in 2018, but that year lawmakers passed a five-year extension. It is now set to expire on July 1, 2023. Representative Felix’s legislation (2023-H 5761A) would extend the program until July 1, 2026.

The bill now heads to the Senate, where Sen. Dawn Euer (D-Dist. 13, Newport, Jamestown) has introduced legislation (S-2023 0163) to remove the sunset entirely and make the program permanent.

“To a lender, a mortgage might just be a line on a spreadsheet. But to a homeowner, it’s so much more than that,” said Senator Euer. “These additional protections help people get back on their feet, stay in their homes and keep paying their bills. That’s better for everyone.”

During the COVID-19 pandemic, the federal government put in place a number of protections for homeowners who were struggling with their mortgage payments. Those protections have now largely expired. That, advocates say, makes extending state-level protections even more urgent.

“For almost a decade, the foreclosure mediation law has been helping struggling homeowners avoid foreclosure and remain in their homes,” said Carol Ventura, Executive Director of RIHousing. “RIHousing is proud to play a part in implementing this important law, and thanks Senator Euer and Representative Felix for promoting legislation to ensure that these important protections will continue to be available to Rhode Island homeowners.”