§ 19-9-6 — § 19-9-6. Lending institutions — Title attorney.

Rhode Island § 19-9-6

• Jurisdiction: Rhode Island
• Title 19: Financial institutions
• Ch. 19-9: Community Obligations and Banking Offenses

Text

§ 19-9-6. Lending institutions — Title attorney.

(a) Every lending institution that accepts an application for any residential mortgage loan or any commercial mortgage loan and requires that a title attorney search the title of the subject real estate, or requires a policy of title insurance, shall permit the prospective mortgagor to select a qualified title attorney or title insurance company of his, her, or its own choice to search the title of the subject real estate and to furnish title insurance. The lending institution shall not unreasonably disapprove a title insurance policy provided or paid for directly or indirectly by a borrower. The disapproval shall be deemed unreasonable if it is not based solely on reasonable standards uniformly applied, relating only to the extent of coverage required or the financial soundness of an insurer. The standards shall not discriminate against any particular insurer, nor shall the standards call for the disapproval of an insurance policy because the policy contained coverage in addition to that required. Acceptance of a title insurance company's policy by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation shall be conclusive proof that the title insurance company meets the reasonable standards required by this section whether or not the borrower is applying for a residential or a commercial mortgage loan.

(b) In the event the prospective mortgagor does not select a qualified title attorney or title insurance company, the prospective mortgagor shall sign a waiver permitting the lending institution to select an attorney. If any lending institution violates this section, an aggrieved party may file a complaint in the superior court of the county in which the aggrieved party shall dwell or has his, her, or its principal place of business, or Providence county, if the superior court of that county shall not be in session, or if the aggrieved party is a nonresident or has no principal place of business in this state, of any other county as may be agreed upon by the parties to the petition, and serve upon the lending institution a petition for an order of the court for the enforcement of this section, and the petition may request and the court shall have jurisdiction to grant, after notice and hearing, an order:

(1) Granting injunctive relief to restrain the lending institution from engaging in the alleged or suspected violation;

(2) Awarding reasonable attorney's fees, costs, and expenses of the action; and

(3) Granting any other relief, as may be required, until the person or lending institution complies with the requirements of this section.

Legislative History

P.L. 1995, ch. 82, § 47.