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Vermont Foreclosure Law
In Vermont, a lender may foreclose on a property either in
court or out of court. The typical timeline for a Vermont
foreclosure is approximately nine months.
Pre-foreclosure Period
One type of foreclosure process in Vermont is strict
foreclosure, which is conducted through the courts. Upon
default, a lender files the necessary court documents to start
the foreclosure, after which the borrower receives a summons to
appear in court. If the court rules against the borrower, the
lender is allowed to take possession of the property or schedule
a sale of the property. The more common type of foreclosure is
allowed when the mortgage permits a lender to sell the property
in the event of borrower default. This type of foreclosure may
be accomplished either in court of out of court, depending on
the type of property being foreclosed. If the lender proceeds
through the courts, the court can rule the property in
foreclosure and allow for a sale of the property. If the
foreclosure is conducted out of court, the lender mails a notice
of the impending foreclosure to the borrower. The notice states
the circumstances, the amount in default that must be paid to
stop the foreclosure and a deadline of no less than 30 days. The
notice must be sent at least 30 days before a notice of sale is
published. If the foreclosure is being conducted out of court, a
borrower may stop the proceedings any time prior to the sale by
paying the default amount plus costs. For court foreclosures,
the borrower usually has six months from the court ruling to
redeem the property. The borrower must pay the full amount
stipulated by the court to redeem.
Notice of Sale / Auction
The notice of sale contains a description of the property,
lender and borrower names, mortgage date and the time, day,
location and terms of the sale. The borrower receives the notice
of sale at least 60 days prior to the sale date. The notice is
published once per week for three weeks in a local newspaper,
with the first notice appearing no less than 21 days before the
sale date. In an out-of-court foreclosure, the lender records
the notice of sale with town records no less than 60 days before
the sale. The filing of this notice occurs instead of filing a
foreclosure complaint in court. The public auction is typically
at the property. At the sale, any person may bid. The property
is sold to the highest bidder, and the borrower is entitled to
receive any surplus from the sale proceeds. Within 90 days after
an out-of-court foreclosure sale, the property ownership is
transferred free and clear to the winning bidder. Within 10 days
after a court foreclosure sale, the court either confirms the
sale or orders a resale. If confirmed, the property ownership is
transferred to the winning bidder.
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