For homeowners facing foreclosure in Vermont, the following is a summary of the state’s foreclosure laws:
Foreclosures in Vermont can be judicial, meaning the bank must file a lawsuit in court in order to foreclose.
In a strict foreclosure, the court gives the home directly to the bank without a foreclosure sale. Strict foreclosure is allowed if the court finds that the value of the property is less than the amount of the mortgage debt.
Vermont law requires one foreclosure notice:
In both a judicial and strict foreclosure, the bank will initiate the foreclosure process by filing a complaint with the court and serving it to the homeowner along with a summons and notice of foreclosure. The summons will let the homeowner know how long they have to file an answer with the court, generally 20 days. In a judicial foreclosure, the bank will also send a notice of sale to the homeowner no fewer than 30 days before the foreclosure sale date and publish the notice in a local newspaper.
Vermont Foreclosure Protections
Vermont law provides protections in accordance with the federal Service Members Civil Relief Act.
Reinstatement and Redemption
Under Vermont law, the homeowner can reinstate in a judicial foreclosure after the end of the redemption period established in the judgment, but before the foreclosure sale, if both the homeowner and the bank agree to the terms.
In Vermont, the redemption period is before the foreclosure sale in a judicial foreclosure, and after the foreclosure decree in a strict foreclosure.
In a judicial foreclosure, the homeowner can redeem the home within six months from the date of the foreclosure decree, unless the court orders a shorter time. The foreclosure sale will take place once the redemption period ends, up until which time the homeowner can also redeem the home. Once the foreclosure sale is complete, the home cannot be redeemed.
In a strict foreclosure, the homeowner can redeem the property within six months from the date of the foreclosure decree, unless the court orders a shorter time period of redemption, or the homeowner and the bank mutually agree to a shorter period.
The bank can request a deficiency judgment against a homeowner in a judicial foreclosure. If the bank buys the home at the foreclosure sale, the deficiency amount is limited to the difference between the fair market value of the home and the total amount of the debt, as well as expenses.
The bank can request a deficiency judgment, which is limited by the fair market value of the property by filing a separate lawsuit.
In Vermont, if the homeowner does not redeem the home, the court will issue a writ of possession. The writ of possession has the same force and effect and is executed in the same manner as a similar writ issued after an eviction process. For information regarding how to avoid foreclosure in Vermont, visit HUD.gov.