Vermont Foreclosure Laws

Vermont Foreclosure Laws

The Vermont foreclosure laws allows lenders to choose between judicial and non-judicial processes when foreclosing deeds of trust or mortgages that are listed in foreclosure listings due to default. The usual time required to complete a foreclosure proceeding in Vermont is 210 days. The security instruments recognized by the state are deeds of trust and mortgages. The Vermont foreclosure laws allow the practice of deficiency judgments and the borrower's Right of Redemption.

Vermont foreclosure laws allows a proceeding called strict foreclosures which works on the basis that the distressed property is owned by the lender until the borrower has completely repaid the mortgage. If the borrower does not live up the conditions of the mortgage agreement, the lender is authorized to seize the property and recover his money by selling it. The laws, however, require the lender to file a lawsuit before proceeding with any foreclosure proceeding. The state's Right of Redemption rules provide the borrower with a time frame of six months in which he can choose to redeem his property by paying the entire outstanding loan balance.

When the security instrument, like a mortgage agreement for example, contains a "Power of Sale" clause, the foreclosure proceeding is termed a Power of Sale Foreclosure. This clause requires the borrower to sell his property in order to repay the balance of the loan balance in default if he is unable to make regular payments. The type of the distressed property in question determines if this type of foreclosure will follow a judicial or non-judicial proceeding.

In a judicial proceeding, the lender is required to file a lawsuit in the court to obtain a court order ordering the initiation of foreclosure proceedings. This foreclosure method is common when the distressed property is small, such as a housing of two units or less and forms the primary residence of the borrower. Foreclosure proceedings for almost all other property types use the non-judicial foreclosure method. In this method, the lender is not required to possess a court order to sell or possess the distressed property.

Procedures to be followed under Vermont foreclosure laws

The laws of Vermont require the lender to serve the borrower with a Notice of Intent to Foreclose a minimum of thirty days prior to publishing a Notice of Sale. The information included in the Notice of Intent has to contain the mortgage details, the conditions on which the borrower defaulted, the lender's rights over the distressed property, and the entire amount in default. Moreover, the borrower is entitled to receive a Notice of Sale a minimum of sixty days prior to the date of the foreclosure sale.

The laws provide the borrower with the right to redeem his property before it can be sold in the foreclosure sale. This can be done by repaying the entire defaulted amount with interest and other miscellaneous charges.

The foreclosure sale is required to be conducted in the form of a public auction that is held inside the premises of the distressed property. Anyone can participate in the bidding and the highest bidder is awarded the property. If the bidding results in a surplus, the borrower in entitled to it. If, however, the distressed property is sold for less than the default amount owed by the borrower, the lender can sue the borrower for deficiency.