Stop Foreclosure in Vermont


How to Stop Foreclosure in Vermont

Notice of Default or NOD is one of the documents that is given to lenders upon foreclosure. This is situation usually takes place when the lender can no longer afford to pay his or her debts and therefore would have to be given notice to pay it as soon as possible.

When a person is already 30 days late when it comes to paying his or her mortgage, a notice of default is usually given to them. There are instances though that an NOD is only given after 90 days. This statement is given to give the lender the jolt that he or she needs in order to pay up their dues.

NOD is therefore a way of preventing foreclosure. This is what helps a person realize the importance of paying his or her debt not only to be able to still own a home but also to protect his or her record. A bad record when it comes to mortgages would not do anyone good because it will make it even more difficult to apply for loans and mortgages in the future.

The good thing is, when an NOD is issued and the lender pays his or her dues, then it would be very easy to revoke it. There wouldn’t be any problems when it comes to his or her records and everything will be back to normal again.

So if you are planning to purchase a home and would like to apply for mortgage, see to it first that you have enough funds to pay for your dream home. Otherwise, wait for a while and then apply for one because this will give you the peace of mind that you need. So remember to always consider first your budget before applying for a home.

Synopsis of Vermont Foreclosure Laws

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

In Vermont, lenders may foreclose on mortgages or deeds of trust in default using the strict or the power of sale foreclosure process.

Strict Foreclosure

The strict foreclosure process is based on the premise that the lender owns the property until the mortgage has been paid in full. If the borrower breaks any of the conditions established in the mortgage prior to the time the loan is paid in full, he or she will lose any right to the property and the lender will either take possession of the property or arrange for it’s sale. In Vermont, a suit must be filed in the county where the property is located before either of these actions can occur. The borrower will be served a summons to appear before the court and informed of his rights, at which time the lender may move for a summary judgment and avoid the trial altogether.

Regardless, the borrower has either a six (6) month (post-1968 mortgages) or a twelve (12) month (pre-1968 mortgages) redemption period.

Power of Sale Foreclosure

A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

In Vermont, power of sale foreclosures are conducted either judicially or non-judicially, depending on the type of property securing the deed of trust or mortgage.

Judicial Foreclosure

In Vermont, lenders who wish to obtain a foreclosure using the power of sale clause in the deed of trust must first file a complaint in a court having jurisdiction in the county where the property is located to try and obtain a decree of sale. This form of foreclosure must be used when the property includes a dwelling of two units or less, with the owner using said property as their principal residence. The sale of this type of property may not be held until seven (7) months after the decree of sale has been issued.

Non-Judicial Foreclosure

In Vermont, when a power of sale is contained in a mortgage relating to any property except for a dwelling house of two units or less, that is occupied by the owner as a principal residence, or farmland, the lender may exercise the power of sale without first commencing a foreclosure action or obtaining a foreclosure decree.

Power of Sale Foreclosure Guidelines

  1. At least thirty (30) days prior to the publication of a notice of sale, a notice of intent to foreclose must be sent to the borrower by registered or certified mail at his or her last known address. The notice of intent must include information on the mortgage to be foreclosed, state the condition breached and the lenders right to accelerate the mortgage, and include the total amount necessary to cure the default. The borrower must also be informed that he or she is entitled to receive a notice of sale at least sixty (60) days prior to the date of sale.
  2. The borrower may redeem the property at any time prior to the foreclosure sale by paying the full amount due on the mortgage, plus costs.
  3. The sale must be held on the property itself, unless otherwise ordered by the court, and the property must be sold to the highest bidder. Anyone may bid at the sale, including the lender. The borrower is entitled to receive any surplus from the sale, but they may also be sued for deficiency if the sale price is not enough to cover the amount of the mortgage in default.
  4. If the property is sold without court action, as in non-judicial foreclosure by power of sale, the notice of sale must include the following language:
  5. “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.”

Where to go to for Foreclosure Help

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

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