.:Foreclosure Timeline:.

The following is a timeline for a typical judicial foreclosure by sale case in Vermont. With few exceptions, most foreclosures in Vermont follow the judicial foreclosure by sale procedure. The exceptions involve cases where a strict foreclosure or non-judicial foreclosure procedure is occasionally allowed.  (See Note at End).

Foreclosure cases in Vermont are filed in the Superior Court of the county where the property is located. Depending on how quickly the foreclosure attorney and the court process the foreclosure paperwork, some of the timeline events can be shortened.

How to Stop a Foreclosure: Bankruptcy is frequently used to stop a foreclosure action. Chapter 7 will usually only delay the foreclosure a few months.  Chapter 13 can be used to stop the foreclosure permanently and give the homeowner up to five years to cure the defaulted mortgage. To avoid losing a property in foreclosure the bankruptcy case must be filed before the foreclosure sale is held. 11 USC §1322(c)(1). Click Here  for more information on stopping foreclosure under the bankruptcy laws.

Vermont Foreclosure Timeline
	1 mon	2 mos	3 mos	4 mos	4.5 mos	6 mos	12 mos	14 ± mos
Payment Due	30 days late	60 days late	30-Day Breach Letter sent	File sent to Foreclosure Attorney	Foreclosure Filed	Judgment Issued	Six-Month Redemption Expires	Foreclosure Sale Held / Eviction
Loan Servicing				Foreclosure Attorney				Eviction

First Month Missed Payment

The first month you fail to make a mortgage payment your mortgage company is likely to contact you by mail and/or phone to inform you of your delinquent status.

Second Month Missed Payment

After missing a second payment, your mortgage company is likely to begin calling the contact numbers that they have for you in order to discuss why you have not made payment.

Third Month Missed Payment

Generally, after the third payment is missed, you are likely to receive a letter from the mortgage company stating the amount you are delinquent, and informing you that you have 30 days to bring your mortgage current. This is called a "Demand Letter" or "Notice to Accelerate". If you do not pay the specified amount or make some form of arrangements by the date given, the mortgage company may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made if you have received this letter.

Fourth Month Missed Payment

Now you usually are nearing the end of the time allowed in your Demand or Notice to Accelerate letter. When the 30 days ends, if you have not paid the full amount or worked out arrangements you will be referred to the Mortgage Company’s foreclosure attorney. You will incur all attorney fees as part of your delinquency.

Foreclosure Filed

Once the foreclosure attorney receives your file it generally takes 10-20 days to institute foreclosure action. The sheriff will serve you with a summons and complaint for foreclosure. Once served you will have 20 days to file a verified answer with the Court. If your mortgage payments are in default and you do not have a legal defense, the mortgage company will be granted judgment. The foreclosure attorney will file an accounting affidavit which the clerk of the court will use to prepare a clerk’s accounting determining the total amount of the foreclosure judgment. The judge will then sign the foreclosure judgment giving you a six month redemption period to pay off the judgment. If you do not pay, the property will be sold at foreclosure sale.

Six Month Redemption Period

Under Vermont Law you automatically get a six month redemption period even if you do not file an answer to the foreclosure complaint. This means you have six months to redeem the property by paying the full amount of the foreclosure judgment. During the redemption period, you can continue living at the property even though you are not making your mortgage payments.

Under certain circumstances the lender may request that the 6 month redemption be shortened, if, for instance, you have abandoned the property or allowing waste to be committed on the property, e.g. pipes freezing, vandalism, etc. In order to get the six months shortened the foreclosure attorney must file a document entitled Motion to Shorten the Period of Redemption. Although this rarely occurs, it is one thing you would want to watch closely for if you are a party to foreclosure action. If such a motion is filed in your case, you may want to retain an attorney or appear in court yourself to argue against it.

Foreclosure Sale

If you do not redeem the property, the foreclosure attorney will arrange for it to be sold at public sale. In addition, once the redemption period has expired the attorney may request a writ of possession from the court. A writ of possession is a court order directing the sheriff to physically remove you from the property. Some foreclosure attorneys wait until the foreclosure sale before requesting a writ of possession to remove you from the property.

The public foreclosure sale is usually conducted by a sheriff or licensed auctioneer. The sale is advertised for three consecutive weeks prior to the sale date. The foreclosure attorney must send you a notice of sale at least 60 days prior to the sale date. The property is sold to the highest bidder. (Usually the mortgage company bids the amount owed on its mortgage. Accordingly, anyone wishing to purchase the property must bid a higher amount).

Foreclosure Sale Confirmed / Eviction

The foreclosure attorney must file with the court a report of the sale within (10) ten days after the sale. The court then issues a confirmation order approving the sale. Once the confirmation order is recorded in the town clerk’s office title passes and the foreclosure is complete. If you have not been evicted already, a writ of possession will be obtained from the court directing the sheriff to remove you from the property. 

 

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Note:

 Strict Foreclosure follows the same timeline shown above, except there is no foreclosure sale at the end of the redemption period. When the redemption period runs out the lender becomes owner of the property without having to conduct a foreclosure sale. 12 VSA 4531. Strict foreclosure is not allowed unless the court finds that the property is worth less than the amount owed on the mortgage and any unpaid taxes - meaning you do not have any equity in the property. 12 VSA 4528(b).

Non-Judicial Foreclosure is a type of foreclosure that does not require court involvement. The foreclosure attorney sends a Notice of Default to the homeowner.  If the default is not cured, a Notice of Sale is published in the newspaper and sent to the homeowner.  A public sale will follow and a foreclosure deed issued to the high bidder.  Nonjudicial foreclosure cannot be used for an owner occupied single family dwelling or a dwelling with two units or less where one unit is occupied by the owner. 12 VSA 4531a.