Vermont Foreclosure Laws
Judicial Foreclosure Available: Yes (Strict Foreclosure)
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: Yes
Deficiency Judgments Allowed: Yes
Time Frame: 210 Days
Public Notice: Complaint
Vermont is a lien theory state, which means that the property is used as collateral for the borrower’s loan. A lien is placed on a property via a mortgage or a deed of trust. In the event that a borrower defaults, lenders in Vermont may foreclose with either the judicial (strict foreclosure) or non-judicial method.
Borrowers in Vermont have a right of redemption, allowing them the chance to reclaim the property once it has been foreclosed by paying off their default in addition to any other costs. The time limit is roughly six (6) months. Mortgages older than 1968 have a one (1) year redemption period.
Lenders in Vermont are allowed to seek a deficiency judgment when a property is sold for less than what was owed on it. If granted, the borrower will be responsible for paying the difference in price.
Types of Foreclosures Allowed in Vermont
Judicial Foreclosure/Strict Foreclosure
Judicial foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The judicial method in Vermont is used in conjunction with strict foreclosure. For this process, the borrower must have agreed in their loan that the lender will own the property until it is completely paid off. If the borrower breaks any stipulation stated in the loan documents before the loan is paid in full, they will lose their property.
The lender will file a lawsuit in the county where the property is located in order to initiate the foreclosure process. The borrower will be asked to appear in court and will be informed of their rights. It will be the lender’s choice whether to move forward with a summary judgment and avoid trial. Regardless of what happens, the borrower will have a six (6) month (twelve if the mortgage was pre-1968) to reclaim the property.
Non-judicial foreclosure, also known as foreclosure by power of sale, allows the property to be sold without court supervision. In order for non-judicial foreclosures in Vermont to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default to be able to recover what is owed on the property.
There are two ways in which a non-judicial foreclosure in Vermont can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following must occur:
1. The borrower must be notified of the intent to foreclose via registered or certified mail at least thirty (30) days before the notice of sale is publicized.
2. The notice must include details about the mortgage, default amount and must also inform the borrower that they are entitled to receive a notice of sale at least sixty (60) days before the scheduled sale date.
3. The borrower may reclaim the property at any time before the foreclosure sale by paying the full amount of the default plus any additional costs.
4. The sale must be held on the property itself, unless otherwise stated by the court, and the must be sold to the highest bidder. The lender may bid at the sale.
5. The borrower is entitled to receive any surplus from the sale, but under Vermont foreclosure law, they may also be sued by the lender for deficiency if the property sells for less than what was owed on it.
Seeking Legal Action
If you have received a notice of foreclosure, it is still not too late to fight for your property. Contact a skilled foreclosure lawyer in Utah right away to discuss your options and file a case. With the help of an elite foreclosure attorney, you can stop your home from being repossessed
Foreclosure lawyers work hard to ensure that your case ends with the best possible outcome. They will speak to your lender and try to work out an alternative plan of action, such as mortgage modification or refinancing, so you don’t lose your home. Since the process of foreclosing costs lenders money, chances are in your favor that your lender will agree to the proposal.
Whether you defaulted because of a pay cut at work, because you lost your job, or due to medical issues, foreclosure attorneys can help you stop the foreclosure on your home. Call today to get in touch with an acclaimed paralegal to fight for your rights as a homeowner in Utah.