How foreclosure works in Vermont

The notices you will receive in Vermont, in order

1. Notice of Default and acceleration letter

   Mailed by your lender or servicer after you fall behind, before any lawsuit

   VTLawHelp, run by Vermont Legal Aid and Legal Services Vermont, says the notice of default tells you how much you are behind and the date to catch up. A later letter may say the lender is 'accelerating' the loan, meaning the full balance is due. Being told you are 'in foreclosure' does not mean a case has been filed; you can call the Superior Court in your county to check.

2. Summons and Complaint with the Important Notice to Homeowner

   Served by a sheriff or other officer; generally after the federal 120-day wait

   The Important Notice to Homeowner form must be the top pages, in two copies, along with a blank Verified Answer form and a Notice of Appearance form. If the lender left the notice out, the clerk cannot accept the case. VTLawHelp says your written answer is due within 21 days.

   V.R.C.P. 80.1(b)(3)

3. Mediation Request form

   Comes with the summons and complaint

   For a home you live in with four or fewer units, the lender must serve two copies of a notice explaining your mediation rights, with a form to ask the court for mediation. Fill it out and file it with the court right away, even if you are already talking to your servicer.

   12 V.S.A. § 4632(c), (d)

4. Copy of the complaint filed with the town clerk

   Filed by the lender when the case starts

   The lender files a copy of the complaint in the town land records, where the clerk notes it next to your mortgage. This is public notice of the case. It does not mean you have lost the home or must move.

   12 V.S.A. § 4932(b)

5. Judgment Order and Decree of Foreclosure

   Entered by the judge after a default, summary judgment or trial

   VTLawHelp says the court first issues a clerk's accounting of what you owe, and you have only a short time to dispute it. The decree then states the total due and the date your redemption period ends, usually six months from the decree for a home you live in.

   12 V.S.A. §§ 4941(d), 4946(b)

6. Notice of sale

   Mailed after the redemption period ends and at least 30 days before the sale; published 3 weeks in a row

   This gives the date, time and place of the auction, which is held at the property unless the court picks another place. The notice must say you can still redeem before the sale by paying the full amount due plus sale costs.

   12 V.S.A. §§ 4952, 4953(a)

7. Report of sale, confirmation order and writ of possession

   After the auction

   The lender asks the court to confirm the sale and must mail you the report and accounting. Title passes when the confirmation order is recorded. If you are still in the home, the court can issue a writ of possession, and a sheriff cannot remove you until at least 14 days after serving it.

   12 V.S.A. §§ 4854, 4946(d), 4954

The legal steps in Vermont

1. Missed payments

   Federal rules generally stop your servicer from starting foreclosure until you are more than 120 days behind. Your lender will mail a notice of default with a date to catch up.

   12 C.F.R. § 1024.41(f)

2. Summons and complaint

   The lender files a foreclosure case and serves you with the papers. Vermont legal aid says you must file a written answer within 21 calendar days of receiving the complaint. The papers must include a notice of your right to mediation and a request form.

   12 V.S.A. §§ 4932, 4632(c)

3. Ask for mediation

   Fill out the mediation request form and send it to the court right away. If you live in the home and it has four units or fewer, the court refers the case to a neutral mediator to look at options for keeping the home.

   12 V.S.A. §§ 4631, 4632

4. Judgment and redemption period

   If the lender wins, the court sets a redemption period, normally six months from the decree for a home you live in. During this time you can keep the home by paying the full amount due under the judgment.

   12 V.S.A. §§ 4941(d), 4946(b), 4949

5. Notice of sale and auction

   If you do not redeem and the court ordered a sale, the notice of sale is published for three weeks in a row and mailed at least 30 days before the sale date. You can still redeem any time before the sale.

   12 V.S.A. §§ 4949, 4952

6. Confirmation of the sale

   The lender asks the court to confirm the sale. Title passes when the confirmation order is recorded. Any extra money is paid out, and the lender must ask for any deficiency before the confirmation order is issued.

   12 V.S.A. § 4954

7. Writ of possession

   If you are still in the home after the redemption period, the court clerk issues a writ of possession at the lender's request and with the court's approval. The sheriff serves it on you and cannot put the lender in possession until at least 14 days after service.

   12 V.S.A. §§ 4941(e), 4946(d), 4854

Common questions in Vermont