Vermont Foreclosure Process and Laws
Quick Facts About the Vermont Foreclosure Process
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Primary Security Instruments: Deed of Trust, Mortgage
Timeline: Typically 210 days
Right of Redemption: Yes
Deficiency Judgments Allowed: Yes
Lenders in Vermont may foreclose on mortgages and deeds of trust through the strict or power of sale foreclosure process.
In the strict foreclosure process, the lender owns the property until the borrower has paid his mortgage in full. Any violations by the borrower in the agreement before the loan is paid will result in the loss of his rights to the property, and the lender can arrange for its sale. A suit must be filed for any of these to occur. The borrower can either have a 6 month (month (post-1968 mortgages) or 12 month (pre-1968 mortgages) redemption period.
Power of Sale Foreclosure
A “power of sale” in a mortgage means that the borrower has pre-authorized the sale of the property to pay off his balance in case of their default. The lender or his representative can sell the property through a judicial or non-judicial process.
Lenders in Vermont who want to obtain a foreclosure using the power of sale clause must file a complaint and obtain a decree of sale. This foreclosure process is used when the property includes a dwelling of two units or less, and it serves as the principal residence of the borrower. The sale can only take place seven months after the decree of sale was issued.
In Vermont, the lender may exercise the power of sale without obtaining a foreclosure degree for any property except for a dwelling house 2 units or less, is occupied by the owner as a principal residence or a farmland.
Power of Sale Foreclosure Guidelines
- A notice of an intent to foreclose must be sent to the borrower through certified mail 30 days before publication of a notice of sale. The notice of intent must include inforamtion on the mortgage to be foreclosed, condition breached and the amount needed to cure the default. The borrower needs to be informed that he or she is entitled to receive a notice of sale 60 days before the date of sale.
- The borrower may redeem his property by paying the remaining balance plus costs.
- The sale must take place on the property itself unless ordered by the court, and anyone can bid on the property, including the lender. Any excess amount must be given to the borrower, while the lender may sue for deficiency if the sale was not enough to cover the amount of mortgage in default.
- If the property is sold through a non-judicial process, the notice of sale must include the following:
“The mortgagor is hereby notified that at any time before the foreclosure sale, the mortgagor has a right to petition the superior court for the county in which the mortgaged premises are situated, with service upon the mortgagee, and upon such bond as the court may require, to enjoin the scheduled foreclosure sale. Failure to institute such petition and complete service upon the foreclosing party, or their agent, conducting the sale prior to sale shall thereafter bar any action or right of action of the mortgagor based on the validity of the foreclosure, the right of the mortgage holder to conduct the foreclosure sale, or compliance by the mortgage holder with the notice requirements and other conditions of section 4532 of Title 12. An action to recover damages resulting from the sale of the premises on the date of the sale may be commenced at any time within one year following the date of the sale, but not thereafter.”
Foreclosure Avoidance Counseling
HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.
If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.
Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.
Burlington Field Office
159 Bank Street, 2nd Floor
Burlington, VT 05401-4411
Phone: (802) 951-6290
Fax: (802) 951-6298
Jurisdiction: State of Vermont
Michael F. McNamara
Field Office Director
Office Hours: 8:30 a.m. to 5:00 p.m.
Monday through Friday