Vermont Bar Association
55th
Mid-Year Meeting
Seminar Materials
Foreclosure: Warning! Proceed with Caution!!
Faculty: S. Stacy Chapman, III, Esq., Moderator
Grace B. Pazdan, Esq.
David Rath, Esq.
Susan J. Steckel, Esq.
Polly Thibault
March 22 & 23, 2012
Hilton Burlington, Vermont
1
FORECLOSURE SEMINAR OUTLINE I. FORECLOSURE PROCESS-NUTS AND BOLTS a. Complaint and notices b. Service c. Default d. Accounting and affidavits e. Judgments i. Strict Foreclosures ii. Judicial Sales 1. Notices 2. Confirmation process iii. Certificate of non-redemption 1. Strict foreclosure 2. Judicial sales 3. Recording iv. Non-judicial foreclosure 1. Commercial 2. Residential II. MEDIATION, HAMP, MODIFICATION AND FOREBEARANCE III. H-403 - PROPOSED LEGISLATION REGARDING PROCESS AND PROCEDURE a. Changes in existing practice
11/9/09 Standard form for Judicial Sale 1
CIVIL DIVISION OVERSIGHT COMMITTEE STANDARD FORM-
JUDICIAL SALE FORECLOSURE JUDGMENT
STATE OF VERMONT
COUNTY, SS.
PLAINTIFF )
)
v. ) Superior Court
) Docket No. - -09 cv
)
DEFENDANT )
JUDGMENT AND DECREE OF FORECLOSURE BY JUDICIAL SALE
This foreclosure action was brought before the Superior Court by complaint
of Plaintiff dated , 2009 and served upon Defendant on , 2009.
Judgment was granted to Plaintiff on , 2009 on the basis of [choose one: default/
summary judgment/ findings and conclusions adjudicating claims]. The Accounting was entered
[choose one: without hearing/ after notice and hearing]. Pursuant to V.R.C.P. 80.1(g) and
V.R.C.P. 58,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED as follows:
1. Judgment. There is presently due and owing the principal amount of $__________,
accrued interest as of of $ , court costs of $ ,
reasonable attorneys’ fees of $ , recording fees in the amount of $ , and
additional amounts allowed in the accounting of $ ________________, making the total amount
due Plaintiff as of the sum of $ , plus interest accruing
at the rate of $ per diem, from the date of accounting until the date of redemption.
2. Taxes. Plaintiff is entitled to have any amounts paid for taxes after the date of the
affidavit of amounts due added to the amount due at time of redemption, pursuant to 12 V.S.A. §
4525, upon proof of payment made.
3. Mortgaged Property. The property which is the subject of this foreclosure, the
“Mortgaged Property,” is described as follows:
[Must include recording information: town, book, and page.]
11/9/09 Standard form for Judicial Sale 2
4. Redemption. It is further ordered that unless [Defendant Mortgagor (name)
_______________] pays to the Clerk of the Court on or before , 2009, the date
of redemption payable to Court, before 4:30 p.m., the sum of $ , together
with any amounts established under paragraph 2 above, and together with per diem interest of
$______ from ________________ to the date of redemption, then the Plaintiff may file a motion
for a writ of possession.
It is further ordered that unless [Most Junior Lienholder Defendant (name)___________]
pays to the Clerk of the Court on or before , 2009, before 4:30 p.m., the sum of
$ , together with any amounts established under paragraph 2 above, and together
with per diem interest of $______ from ________________ to the date of redemption, then such
party shall be foreclosed and forever barred from all equity of redemption in the Mortgaged
Property.
It is further ordered that unless [Most Senior Lienholder Defendant (name) ]
pays to the Clerk of the Court on or before , 2009, before 4:30 p.m., the sum of
$ , together with any amounts established under paragraph 2 above, and together
with per diem interest of $______ from ________________ to the date of redemption, then such
party shall be foreclosed and forever barred from all equity of redemption in the Mortgaged
Property.
5. Mortgagor Defendant’s Additional Right to Redeem. Defendant/Mortgagor
(name) may also redeem up to the date of the judicial sale, described in
paragraph 7 below, by payment of the redemption amount pursuant to 12 V.S.A. § 4532 (i).
6. Non-Redemption; Notice of Sale. If the Defendants shall fail to redeem the
Mortgaged Property as set forth in paragraph 4 above, then the Court shall issue a Certificate of
Non-Redemption, and the Mortgaged Property shall be sold as a whole to the highest bidder at
public sale by a sheriff, deputy sheriff, constable, licensed auctioneer, or other disinterested
person specifically appointed by the Court, pursuant to 12 V.S.A. § 4531 et seq. and V.R.C.P.
80.1. The sale shall take place within six months of the last redemption date under paragraph 4
above, unless extended by the Court or the case is stayed by a bankruptcy filing. Plaintiff shall
send a Notice of Sale as required by 12 V.S.A. § 4532 (e) and (f) at least 60 days before the sale.
11/9/09 Standard form for Judicial Sale 3
If the designation of a specific date and time of sale is not included , Plaintiff shall send a
supplemental Notice of Sale as required by 12 V.S.A. § 4532 (e) and (f) at least 21 days before
the sale, specifying the exact date and time of the sale. Plaintiff shall also publish a Notice of
Sale in a newspaper distributed in [town of property] in the State of Vermont for three (3)
consecutive weeks prior to the date of sale and shall specify that the property shall be sold to the
highest bidder at a public sale to be held at the Mortgaged Property on a specified date and time.
The first publication shall be not less than 21 days prior to the date of sale. Prior to any request
for confirmation, Plaintiff shall file a copy of all Notices of Sale with the Court with a certificate
of service. Plaintiff shall also file a copy of the published Notice of Sale with the Court, with a
copy of publications or a certificate of publication dates.
7. Public Sale. At the sale, the person holding the public sale shall sell to the highest
bidder all of the Mortgaged Property, subject to property taxes and municipal assessments, if
any. If the Plaintiff makes the highest bid, Plaintiff shall be required to pay cash or certified
funds only to the extent that its bid is in excess of the sum due it by the Defendant Mortgagor up
to the date of sale under this Judgment and Decree. The purchaser at the sale shall pay cash or
certified funds to the person holding the sale. The Notice of Sale shall specify that this form of
payment is authorized. In any case, a deposit shall be paid at the time of sale of at least
$10,000.00 in the form of cash, a bank treasurer’s check, or certified funds. Plaintiff is
authorized to require the purchaser to sign a Purchase and Sales Agreement. If specified in the
Notice of Sale that includes the date and time of sale, the person holding the public sale may, for
good cause, postpone the sale for a period of up to thirty (30) days, from time to time until it is
completed, giving notice of such adjournment and specifying the new date by public
proclamation at the time and place appointed for the sale.
8. Report of Sale. The person holding the public sale shall file a Report of Sale, under
oath, with the Court within ten (10) days of the date of sale pursuant to 12 V.S.A. § 4533 (a).
The person holding the public sale, or the attorney for the Plaintiff, shall retain all sale proceeds
as custodian, to be disbursed in accordance with the final Confirmation Order of this Court
promptly following confirmation pursuant to 12 V.S.A. § 4533 (a).
9. Confirmation. Plaintiff shall file a motion for confirmation, which shall set forth the
satisfaction of all statutory requirements for confirmation, supported by affidavit if necessary,
and a proposed distribution of sale proceeds in specified amounts together with a factual basis
11/9/09 Standard form for Judicial Sale 4
for such distribution supported by the record and affidavit(s) if necessary. The Court may
require Plaintiff to serve any interested persons, as well as all parties who appeared in the case,
with any motion for confirmation and notice of confirmation hearing scheduled pursuant to 12
V.S.A. § 4533 (a). At confirmation, Plaintiff may be allowed reasonable attorneys’ fees and the
reasonable expenses of making the sale pursuant to 12 V.S.A. § 4533 (a) as well as taxes paid
since the accounting, if any, pursuant to 12 V.S.A. §4525. If the Court confirms the sale, the
Court shall issue a Final Confirmation Order which shall set forth the information required by
V.R.C.P. 80.1 (k) and shall order distribution of sale proceeds to named persons in specified
amounts in accordance with V.R.C.P. 80.1 (j)(1). If the Court confirms the sale, the
Confirmation Order shall constitute conclusive evidence as against all persons that the power
was duly executed. When the purchase price has been paid in full and the Confirmation Order
recorded in the land records, transfer of title is effectuated pursuant to 12 V.S.A. §4533 (b).
10. Deficiency Claim. Any motion for a deficiency judgment based on a claim in the
complaint shall be filed at the same time as the motion for confirmation pursuant to V.R.C.P.
80.1 (j)(2); otherwise any claim for a deficiency judgment will be dismissed at the time of entry
of the Confirmation Order.
If you wish to appeal this judgment, you must request permission to appeal by
motion filed with the Court within ten (10) days of the date of entry of the judgment, not
including that date or Saturdays, Sundays, or legal holidays.
Dated at ___________, Vermont this _____day of ________________, 2009.
___________________________
Hon.
Presiding Judge
2
IV. LENDER PERSPECTIVES a. Pre-foreclosure collection process b. Default letters c. Foreclosure process concerns and frustrations V. BORROWERS' PERSPECTIVE a. Defenses b. Answers c. Other Issues VI. ETHICAL CONCERNS a. Lenders b. Borrowers c. Pro-se defendants
6/11/09 Standard Form for Strict Foreclosure 1
CIVIL DIVISION OVERSIGHT COMMITTEE
STANDARD STRICT FORECLOSURE JUDGMENT FORM
STATE OF VERMONT
COUNTY, SS.
PLAINTIFF )
)
v. ) Superior Court
) Docket No. - -09 cv
)
DEFENDANT )
JUDGMENT AND DECREE OF STRICT FORECLOSURE
This foreclosure action was brought before the Superior Court by complaint
of Plaintiff dated , 2009 and served upon Defendant on , 2009.
Judgment was granted to Plaintiff on , 2009 on the basis of [choose one: default/
summary judgment/ findings and conclusions adjudicating claims]. The Court found, on
_____________, 2009, on the basis of competent evidence, that there is no substantial value in
the Mortgaged Property in excess of the amount due the Plaintiff; therefore the Plaintiff’s
motion for a decree by strict foreclosure is granted. The Accounting was entered [choose one:
without hearing/ after notice and hearing]. Pursuant to V.R.C.P. 80.1(g) and V.R.C.P. 58,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED as follows:
1. Judgment. There is presently due and owing the principal amount of $__________,
accrued interest as of of $ , court costs of $ ,
reasonable attorneys’ fees of $ , and recording fees in the amount of $ ,
and additional amounts allowed in the accounting of $ ________________, making the total
amount due Plaintiff as of the sum of $ ,
plus interest accruing at the rate of $ per diem, from the date of accounting until the date
of redemption.
2. Taxes. Plaintiff is entitled to have any amounts paid for taxes after the date of the
6/11/09 Standard Form for Strict Foreclosure 2
affidavit of amounts due added to the amount due at time of redemption, pursuant to 12 V.S.A. §
4525, upon proof of payment made.
3. Mortgaged Property. The property which is the subject of this foreclosure, the
“Mortgaged Property,” is described as follows:
[Must include recording information: town, book, and page.]
4. Redemption. It is further ordered that unless [Defendant Mortgagor(name)_______ ]
pays to the Clerk of the Court on or before , 2009, before 4:30 p.m., the time of
redemption, the sum of $ , together with any amounts established under paragraph
2 above, and together with per diem interest of $______ from ________________ to the date of
redemption, then such party shall be foreclosed and forever barred from all equity of redemption
in the Mortgaged Property.
It is further ordered that unless [Most Junior Lienholder Defendant (name) ______] pays
to the Clerk of the Court on or before , 2009, before 4:30 p.m., the sum of
$ , together with any amounts established under paragraph 2 above, and together
with per diem interest of $______ from _____ ______ to the date of redemption, then such party
shall be foreclosed and forever barred from all equity of redemption in the Mortgaged Property.
It is further ordered that unless [Most Senior Lienholder Defendant (name) ______] pays
to the Clerk of the Court on or before , 2009, before 4:30 p.m., the sum of
$ , together with any amounts established under paragraph 2 above, and together
with per diem interest of $______ from ____________ to the date of redemption, then such party
shall be foreclosed and forever barred from all equity of redemption in the Mortgaged Property.
5. Non-Redemption; Writ of Possession. If the Defendants shall fail to redeem the
Mortgaged Property as set forth above, then the Clerk of the Court shall issue a Certificate of
Non-Redemption, and shall issue a writ of possession at the Plaintiff’s request.
If you wish to appeal this judgment, you must request permission to appeal by
motion filed with the Court within ten (10) days of the date of entry of the judgment, not
including that date or Saturdays, Sundays, or legal holidays.
Dated at ___________, Vermont this _____day of ________________, 2009.
6/11/09 Standard Form for Strict Foreclosure 3
___________________________
Hon.
Presiding Judge
STANDARD FORM FORECLOSURE-JUDGMENT-FEDERAL LIENS
COURTESY OF MELISSA A.D. RANALDO, ASSISTANT U.S. ATTORNEY,
DISTRICT OF VERMONT
STATE OF VERMONT
VERMONT SUPERIOR COURT CIVIL DIVISION
___________Unit Docket No. ___________
_____________________________________,
Plaintiff
v.
_____________________________________,
Defendants
JUDGMENT AND DECREE OF FORECLOSURE
BY JUDICIAL SALE
This foreclosure action was brought before the __________________Superior Court by
Complaint of Plaintiff, ___________________, dated ____________________ and served
upon the Defendants on or before November 6, 2010. Judgment was granted to Plaintiff on
_____________, 201__ on the basis of summary/default judgment as to Defendant(s). The
Accounting was entered without hearing / after notice of hearing. Pursuant to V.R.C.P. 80.1(g)
and V.R.C.P. 58, it is
IT IS HEREBY ORDERED, ADJUDGED and DECREED, as follows:
1. Judgment. There is presently due and owing the principal amount of
$_______________, accrued interest as of _____________________ of $_____________;
court costs of $____________; reasonable attorneys’ fees of $______________; recording fees
in the amount of $_________; and additional amounts allowed in the accounting of
$_____________; making the total amount due Plaintiff, as of _________________, 2012, the
sum of $___________________, plus interest accruing at the rate of $_____________ per diem
from the date of accounting until the date of redemption.
2. Taxes and Other Advances. Plaintiff is entitled to have any amounts paid for
taxes after the date of the Affidavit of Amounts Owing added to the amount due at the time of
redemption, pursuant to 12 V.S.A. §4525, upon proof of payment made. Plaintiff shall also be
entitled to have any amounts paid for other advances made after the date of the Affidavit added
to the amount due at the time of redemption with the approval of the Court.
3. Mortgaged Property. The property which is the subject of this foreclosure, the
“Mortgaged Property,” is described as follows:
PROPERTY ADDRESS: ________________________
PROPERTY DESCRIPTION:
Being all and the same land and premises conveyed to
Reference is hereby made to the aforementioned instruments, the records thereof and the
references therein contained, all in further aid of this description.
4. Redemption. It is FURTHER ORDERED that unless ___________pays to the
Clerk of the Court on or before _______________, 2012, the date of redemption payable to the
Court, before 4:30 p.m., the sum of $________________, together with any amounts
established under paragraph 2 above and per diem interest of $____________ from
______________, 2012 to the date of redemption, then the Plaintiff may file a motion for a writ
of possession.
It is FURTHER ORDERED that unless the United States of America pays to the Clerk
of the Court on or before ___________________, 20__, before 4:30 p.m., the sum of
$_____________, together with any amounts established under paragraph 2 above, and
together with per diem interest of $_____ from ______________ to the date of redemption,
then such party shall be foreclosed and barred from all equity of redemption in the Mortgaged
Property, but the United States of America shall have a further right to redeem the property
within [120 days for tax liens, one year for all other federal liens and mortgages] following the
transfer of title to the purchaser at the public sale provided for in this Decree if its [tax lien/lien/
mortgage] has not been discharged prior to or as a result of that sale, and the equity of
redemption of the United States of America shall not be foreclosed unless such public sale is
held.
It is FURTHER ORDERED that unless ______________ pays to the Clerk of the Court
on or before ____________, 2012, before 4:30 p.m., the sum of $______________, together
with any amounts established under paragraph 2 above and per diem interest of $__________
from ________________, 2012 to the date of redemption, then such party shall be foreclosed
and forever barred from all equity of redemption in the Mortgage Property.
5. Defendant/Mortgagor’s Additional Right to Redeem. Defendants/mortgagors
____________________ may also redeem up to the date of the judicial sale, described in
paragraph 7 below, by payment of the redemption amount pursuant to 12 V.S.A. § 4532(i).
6. Non-Redemption; Notice of Sale. If the Defendants shall fail to redeem the
Mortgaged Property as set forth in paragraph 4 above, then the Court shall issue a Certificate of
Non-Redemption, and the Mortgaged Property shall be sold as a whole to the highest bidder at
public sale by a sheriff, deputy sheriff, constable, licensed auctioneer or other disinterested
person specifically appointed by the Court, pursuant to 12 V.S.A. §4531 et seq. and V.R.C.P.
80.1. The sale shall take place within six (6) months of the last redemption date under
paragraph 4 above, unless extended by the Court or the case is stayed by a bankruptcy filing.
Plaintiff shall send a Notice of Sale as required by 12 V.S.A. § 4532(e) and (f) at least 60 days
before the sale. If the designation of a specific date and time of sale is not included, Plaintiff
shall send a supplemental Notice of Sale as required by 12 V.S.A. § 4532(e) and (f) at least 21
days before the sale, specifying the exact date and time of the sale. The Plaintiff shall also
written notice of the time and place of the sale, by certified mail, return receipt requested, at
least twenty (20) days prior to the date of the sale, to the Attorney General of the United States,
in Washington, D.C., and to the U.S. Attorney for the District of Vermont, at P.O. Box 570,
Burlington, Vermont 05402. Plaintiff shall also publish a Notice of Sale in a newspaper
distributed in the town of ___________, Vermont for three (3) consecutive weeks prior to the
date of sale and shall specify that the property shall be sold to the highest bidder at a public sale
to be held at the Mortgaged Property on a specified date and time. The first publication shall
be not less than 21 days prior to the date of sale. Prior to any request for confirmation, Plaintiff
shall file a copy of all Notices of Sale with the Court with a certificate of service. Plaintiff shall
also file a copy of the published Notice of Sale with the Court, with a copy of the publications
or a certificate of publication dates.
7. Public Sale. At the sale, the person holding the public sale shall sell to the
highest bidder all of the Mortgaged Property, subject to property taxes and municipal
assessments, if any, and subject to the right of the United States of America to redeem the same
on or before [120 days for tax liens/one year for other federal liens and mortgages] from the
date of the transfer of title to the purchaser at the public sale if its tax lien has not been
discharged prior to or as a result of that sale. If the Plaintiff makes the highest bid, Plaintiff
shall be required to pay cash or certified funds only to the extent that its bid is in excess of the
sum due it by the Defendants/mortgagors up to the date of the sale under this Judgment and
Decree. The purchaser at the sale shall pay cash or certified funds to the person holding the
sale. The Notice of Sale shall specify that this form of payment is authorized. In any case, a
deposit shall be paid at the time of sale of at least Ten Thousand Dollars ($10,000) in the form
of cash, a bank treasurer’s check, or certified funds. This provision shall not be required of
Plaintiff or its designee.
Plaintiff is authorized to require the purchaser to sign a purchase and sales agreement.
If specified in the Notice of Sale that includes the date and time of sale, the person holding the
public sale may, for good cause, postpone the sale for a period of up to thirty (30) days, from
time to time, until it is completed, giving notice of such adjournment and specifying the new
date by public proclamation at the time and place appointed for the sale.
8. Report of Sale. The person holding the public sale shall file a Report of Sale,
under oath, with the Court within ten (10) days of the date of sale pursuant to 12 V.S.A. §
4533(a). The person holding the public sale, or the attorney for the Plaintiff, shall retain all sale
proceeds as custodian, to be disbursed in accordance with the final Confirmation Order of this
Court promptly following confirmation pursuant to 12 V.S.A. § 4533 (a).
9. Confirmation. Plaintiff shall file a motion for confirmation, which shall set
forth the satisfaction of all statutory requirements for confirmation, supported by affidavit if
necessary, and a proposed distribution of sale proceeds in specified amounts together with a
factual basis for such distribution supported by the record and affidavit(s) if necessary. The
United States shall be paid interest on its tax lien in accordance with the rate set out in 26
U.S.C. § 6621. The portion of this Decree setting forth the order for redemption by the
Defendants does not establish the priority of interests in the surplus sale proceeds. The Court
may require Plaintiff to serve any interested persons, as well as all parties who appeared in the
case, with any motion for confirmation and notice of confirmation hearing scheduled pursuant
to 12 V.S.A. § 4533(a).
At confirmation, Plaintiff may be allowed reasonable attorneys’ fees and the reasonable
expenses of making the sale pursuant to 12 V.S.A. § 4533(a) as well as taxes paid since the
accounting, if any, pursuant to 12 V.S.A. §4525. If the Court confirms the sale, the Court shall
issue a Final Confirmation Order which shall set forth the information required by V.R.C.P.
80.1 (k) and shall order distribution of sale proceeds to named persons in specified amounts in
accordance with V.R.C.P. 80.1 (j)(1). If the Court confirms the sale, the Confirmation Order
shall constitute conclusive evidence as against all persons that the power was duly executed.
When the purchase price has been paid in full and the Confirmation Order recorded in the land
records, transfer of title is effectuated pursuant to 12 V.S.A. §4533 (b). The Confirmation
Order shall further state that the public sale is confirmed and the title is transferred subject to
and without disturbing the right of the United States of America to redeem the property within
[120 days for tax liens, one year for other federal liens and mortgages] from the date of the
transfer.
10. Deficiency Claim. Any motion for a deficiency judgment based on a claim in
the Complaint shall be filed at the same time as the motion for confirmation pursuant to
V.R.C.P. 80.1 (j)(2); otherwise any claim for a deficiency judgment will be dismissed at the
time of entry of the Confirmation Order.
11. United States’ Post-Sale Redemption Rights. In the event that the lien of the
United States of America has not been fully satisfied from the proceeds of the sale, the United
States shall have [120 days for tax liens, one year for other federal liens and mortgages] from
the date of transfer of title to the purchaser at the public sale in which to redeem the Mortgaged
Property. In the event that the purchaser at the public sale is the mortgagee/Plaintiff whose lien
is being foreclosed, the United States of America shall be required to pay the purchaser the
amount of the debt that has been extinguished by the sale. This amount shall be the lesser of
(a) the mortgagee/Plaintiff’s debt, or (b) the fair market value of the property. In the event that
the purchaser at the public sale is not the mortgagee/Plaintiff, the United States shall be
required to pay the purchaser the full amount that purchaser paid for the property. Under either
circumstance, the United States shall also pay interest at the rate of six percent (6%) from the
date of the transfer to the date of redemption together with the amount, if any, equal to the
excess of (a) the actual expenses necessarily incurred in connection with the property, over (b)
the income from such property plus (to the extent the property is used by the purchaser) a
reasonable rental value of the property, all as provided for in 28 U.S.C. § 2410(d).
In the case of redemption by the United States of America after the public sale, and
upon application of the United States to this Court, this Court shall issue a Modified Final
Confirmation Order to the United States of America. Such Modified Confirmation Order, if
applied for and issued by the Court, shall constitute conclusive evidence as against all persons
that the United States’ right of redemption was duly executed. When the redemption price has
been paid in full and the Modified Final Confirmation Order recorded in the land records,
transfer of title to the United States is effectuated pursuant to 12 V.S.A. §4533 (b).
If you wish to appeal this judgment, you must request permission to appeal by
motion filed with the Court within ten (10) days of the date of entry of the judgment, not
including that date or Saturdays, Sundays or legal holidays.
DATED at ___________________, Vermont this _____ day of ____________, 2012.
____________________________
Hon. _______________________
Presiding Judge
_______________Superior Court
9/16/09 Form Motion for Confirmation/Deficiency 1
CIVIL DIVISION OVERSIGHT COMMITTEE STANDARD FORM
MOTION FOR CONFIRMATION ORDER
STATE OF VERMONT
COUNTY, SS.
PLAINTIFF )
)
v. ) Superior Court
) Docket No. - -09 cv
DEFENDANT )
Motion for Confirmation Order [and Deficiency Judgment]
A Judgment and Decree of Foreclosure was entered on ______________. All
requirements have been met for the issuance of a Confirmation Order as set forth below
and supported by the record and attached affidavit(s).
I. Execution of Power of Sale.
1. The record shows that no Defendant redeemed the property prior to the
redemption date(s) set forth in the Decree, and mortgagor did not redeem prior
to sale.
2. The record shows that Notices of Sale were served on the Mortgagor/
Defendant, and all tenants with a recorded interest at the time the lis pendens
was filed, at least 60 days prior to the sale. To the extent that the first Notice
of Sale did not specify the date and time of sale, a supplemental Notice of Sale
was sent with a specific date and time at least 21 days prior to the sale.
Certificates of service and copies of all such Notices of Sale have previously
been filed with the Court or are attached.
3. A Notice of Sale was published for three successive weeks in ____________,
a newspaper of general circulation in the town of the property, on ________,
_______, and _________; the first publication date was at least 21 days
before ________, the date of sale. A copy of the published Notice of Sale has
previously been filed with the Court, or is attached.
4. The Notices of Sale filed with the Court show that all required information
was given:
a. recording information concerning the mortgage;
b. the identity of the mortgagor and original and current mortgagee and
any assignments;
c. the date, time, and place of the sale (including the terms on which the
sale could be adjourned);
9/16/09 Form Motion for Confirmation/Deficiency 2
d. the legal description of the premises;
e. the terms of the sale;
f. a statement that the mortgagor was entitled to redeem until the date of
sale; and
g. information about where to inquire for additional terms.
5. A Report of Sale, filed with the Court on oath, shows that the sale took place
on ___________, 2009, that the sale took place in conformance with the
Notices of Sale, that there were ____ bidders, and that the property was sold
to the highest bidder, _____________, for $______________.
II. Proposed Distribution of Proceeds
Judgment amount due per Decree $________________
Per diem to sale:_____(days) X $_____(per diem)= $________________
Taxes paid by Plaintiff after accounting (per affid.) $________________
Expenses of sale (per affidavit):
Auctioneer $__________
Other (specified) $__________
Total expenses $________________
Total due Plaintiff $________________
Proceeds of sale $________________
Surplus, if any, payable as follows: $________________
Senior lienholder $__________
Junior lienholder $__________
Mortgagor/Defendant $__________
[III. Motion regarding Deficiency Plaintiff moves for [choose one: default judgment or summary judgment] on
Count ___ in the complaint for a deficiency judgment in the amount of $__________.
See attached affidavit(s).
or
Plaintiff acknowledges that its claim for deficiency is satisfied.
or
Plaintiff dismisses its claim for further judgment with prejudice [or, for good
cause shown by attached affidavit, without prejudice].]
WHEREFORE, Plaintiff requests that:
1) A Confirmation hearing be scheduled and a confirmation Order issue, and
[2) Its claim for a deficiency judgment be disposed of as set forth above.]
9/16/09 Form Motion for Confirmation/Deficiency 3
Dated at ___________ this ______ day of _____________, 2009.
Attorney __________
9/16/09 Standard Form Confirmation Order 1
CIVIL DIVISION OVERSIGHT COMMITTEE STANDARD FORM
CONFIRMATION ORDER
STATE OF VERMONT
COUNTY, SS.
PLAINTIFF )
)
v. ) Superior Court
) Docket No. - -09 cv
)
DEFENDANT )
Confirmation Order
A Judgment and Decree of Foreclosure was entered on ______________. Upon
consideration of the Report of Sale and Motion for Confirmation filed by Plaintiff, and
with reference to the public sale held on ______________,
It is ORDERED, ADJUDGED, and DECREED as follows:
1. That the power of sale was duly executed pursuant to 12 V.S.A. § 4533(a),
that statutory requirements of notice were met and the conduct of the sale met
statutory requirements for a public sale, and that the sale price for the property
of ______________ is reasonable under the circumstances and is confirmed;
2. That the premises which were the subject of the sale are described as follows:
[legal description, with recording references]
3. That the sale reported is hereby confirmed and title to the premises shall be
transferred to ______________ .
4. That the parties whose interests are hereby foreclosed are: ______________,
and Plaintiff is entitled to a writ of possession, to be issued by the Clerk upon
request, against possession by these named parties.
5. That title shall transfer to ______________ free and clear of the interests of
the above named defendants and any other parties who have recorded interests
in the property which arose after the filing of the Complaint for Foreclosure in
the land records and who did not intervene in this action, but subject to any
property taxes and municipal assessment.
9/16/09 Standard Form Confirmation Order 2
6. That the recording of this order or a deed from ______________ [person who
conducted the sale] shall effectuate the transfer of title to the above described
premises to ______________.
7. That the proceeds of the sale shall be distributed as follows:
Auctioneer ______________
Plaintiff ______________
Lienholder ______________
Mortgagor/Defendant ______________
[8. That Plaintiff’s claim for a deficiency judgment is [dismissed with prejudice,
dismissed without prejudice, satisfied, to be set for hearing, etc.].
Dated at ___________, Vermont this _____day of ________________, 2009.
___________________________
Hon.
Presiding Judge
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VT LEG 266061.1
H.4031
Introduced by Representatives Kupersmith of South Burlington and Koch of2
Barre Town3
Referred to Committee on4
Date:5
Subject: Court procedure; foreclosure of mortgages6
Statement of purpose: This bill proposes to update and consolidate statutory7
provisions regarding foreclosure of mortgages.8
An act relating to foreclosure of mortgages9
It is hereby enacted by the General Assembly of the State of Vermont:10
Sec. 1. 12 V.S.A. chapter 172 is added to read:11
CHAPTER 172. FORECLOSURE OF MORTGAGES12
Subchapter 1. General Provisions13
§ 4931. DEFINITIONS14
As used in this chapter:15
(1) “Agricultural activity” includes the growing, raising, and production16
of horticultural and silvicultural crops, grapes, berries, trees, fruit, poultry,17
livestock, grain, hay, and dairy products.18
(2) “Dwelling house” means a residential structure or mobile home19
which contains one to four family housing units, or individual units of20
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VT LEG 266061.1
condominiums or cooperatives, each of which is used or intended to be used as1
a residence.2
(3) “Farmland” means land devoted primarily to commercial3
agricultural activities.4
(4) “Value” means market value less all reasonable expenses that would5
be incurred in selling the property. Market value for purposes of this section6
may be determined based on evidence of market value deemed by the court to7
be reasonably reliable, which may include grand list valuation and the common8
level of appraisal used in the town where the property is located, if the court9
finds such evidence to be reasonably reliable.10
§ 4932. VENUE; JOINDER OF PARTIES; RECORDING11
(a) Actions to foreclose a mortgage under subchapter 2 or 3 of this chapter12
shall be brought in the superior court of the county where the land lies, or, if13
the land described in the mortgage lies in more than one county, then in one of14
the counties in which the land lies.15
(b) The plaintiff shall file a copy of the complaint in the town clerk’s office16
in each town where the mortgaged property is located. The clerk of the town17
shall minute on the margin of the record of the mortgage that a copy of18
foreclosure proceedings on the mortgage is filed. The filing shall be sufficient19
notice of the pendency of the action to all persons who acquire any interest or20
lien on the mortgaged premises between the dates of filing the copy of21
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VT LEG 266061.1
foreclosure and the recording of the final judgment in the proceedings.1
Without further notice or service, those persons shall be bound by the2
judgment entered in the cause and be foreclosed from all rights or equity in the3
premises as completely as though they had been parties in the original action.4
(c) If the mortgaged property is subject to a residential rental agreement, as5
defined in 9 V.S.A. § 4451:6
(1) The plaintiff shall join as a party defendant any person occupying7
the mortgaged property pursuant to a residential rental agreement as of the date8
the copy of the complaint is recorded in the land records. Service of the9
complaint on the tenant shall be sufficient if mailed to the tenant by first class10
mail at the address specified in the rental agreement, if the agreement is11
recorded, or to the “occupant” at the address of the leased premises if the12
agreement is not recorded.13
(2) The summons and complaint served on any person occupying the14
premises pursuant to a residential rental agreement shall contain the following15
notice, written in at least 14-point type:16
THE PROPERTY IN WHICH YOU LIVE IS BEING17
FORECLOSED UPON. YOU ARE NAMED AS A DEFENDANT18
IN THE FORECLOSURE BECAUSE YOUR RIGHT TO REMAIN19
ON THE PREMISES MAY END WHEN THE FORECLOSURE IS20
COMPLETED. YOU MUST NOTIFY THE COURT OF YOUR21
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VT LEG 266061.1
NAME AND ADDRESS IN ORDER TO BE KEPT INFORMED OF1
THE STATUS OF THE FORECLOSURE.2
(3) Upon receipt of the complaint, the owner of the mortgaged property3
shall notify each tenant who enters into a residential rental agreement that the4
premises are the subject of a pending foreclosure action and that, in the event5
the owner is unable to redeem the premises, the tenant may be required to6
vacate the premises upon 30 days’ notice. The failure of the owner to provide7
notice under this subsection shall not affect or invalidate the foreclosure action.8
(d) All proceedings shall be before the presiding judge alone, and trial shall9
be without jury.10
§ 4933. NOTICE TO COMMISSIONER OF BANKING, INSURANCE,11
SECURITIES, AND HEALTH CARE ADMINISTRATION12
(a) When the mortgage holder files an action under subchapter 2 or 3 of13
this chapter to foreclose owner-occupied one- to four-family residential14
property, the mortgage holder shall simultaneously file a notice of foreclosure15
with the commissioner of the department of banking, insurance, securities, and16
health care administration. The commissioner may require that the notice of17
foreclosure be sent in an electronic format. The notice of foreclosure shall18
include:19
(1) the name and current mailing address of the mortgagor;20
(2) the address of the property being foreclosed;21
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VT LEG 266061.1
(3) the name of the current mortgage holder, along with the address and1
telephone number of the person or entity responsible for workout negotiations2
concerning the mortgage;3
(4) the name of the original lender, if different;4
(5) the name, address, and telephone number of the mortgage servicer, if5
applicable; and6
(6) any other information the commissioner may require.7
(b) The court clerk shall not accept a foreclosure complaint for filing8
without a certification by the plaintiff that the notice of foreclosure has been9
sent to the commissioner of banking, insurance, securities, and health care10
administration in accordance with subsection (a) of this section.11
(c) Acceptance of a foreclosure complaint by the court clerk that, due to a12
good faith error or omission by the plaintiff or the clerk, does not contain the13
certification required in subsection (a) of this section shall not invalidate the14
foreclosure proceeding, provided that the plaintiff files the required notice with15
the commissioner within 10 days of obtaining knowledge of the error or16
omission.17
§ 4934. SUPPLEMENTAL JUDGMENT JOINING PARTIES; RECORDING18
At any time, without further notice or service on the purchaser or mortgage19
or lienholder whose interest in the property being foreclosed first arose after20
the filing of the complaint in the town clerk’s office, and upon filing certified21
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VT LEG 266061.1
copies of the deed, mortgage, or attachment with the clerk of the court by the1
plaintiff in the foreclosure action, any superior judge may sign a supplemental2
judgment specifically naming that party. Reference to the deed, mortgage, or3
lien and the supplemental judgment may be filed in the town clerk’s office for4
record, and it shall have the same force and effect as though that person had5
been made a party defendant in the original action.6
§ 4935. TAXES PAID BY MORTGAGEE7
A tax assessed upon mortgaged real estate in this state may be paid by the8
mortgagee or assignee of the mortgage upon such property. The amount so9
paid including costs, if any, shall thereupon be added to and become a part of10
the debt or obligation secured by such mortgage.11
§ 4936. FORECLOSURE OF REAL OR PERSONAL PROPERTY12
A mortgage or a security agreement constituting a lien on both real and13
personal property to secure the payment of a debt, whether evidenced by one14
or more instruments, may be foreclosed in an action under subchapter 2 or 3 of15
this chapter.16
§ 4937. ATTORNEY’S FEES17
When a mortgage contains an agreement on the part of the mortgagor to pay18
the mortgagee, in the event of foreclosure, the attorney’s fees incident thereto,19
and claim is made therefor in the complaint, upon hearing, the court in which20
the complaint is brought shall allow such fee as in its judgment is just.21
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VT LEG 266061.1
§ 4938. EFFECT ON BANKRUPTCY PROCEEDINGS1
Nothing in this chapter shall be construed to supersede any provision of2
Title 11 of the United States Code.3
Subchapter 2. Strict Foreclosure4
§ 4941. DECREE FORECLOSING EQUITY OF REDEMPTION; WRIT OF5
POSSESSION6
(a) In any action for foreclosure with regard to any mortgage encumbering7
property except for a dwelling house of two units or fewer that is currently8
occupied by the owner as his or her principal residence at the time the plaintiff9
applies for entry of judgment, or farmland, the court may, if no sale is10
requested by the plaintiff or ordered by the court pursuant to subsection (b) of11
this section, issue a judgment and decree of foreclosure without requiring a12
judicial sale of the premises.13
(b) In an action brought under subsection (a) of this section, any party may14
by written motion request, or the court in its discretion may order, that property15
be sold at a judicial foreclosure sale, whether or not the mortgage contains a16
power of sale.17
(c) No decree foreclosing the right of redemption without sale shall be18
issued absent a finding by the court, based on competent evidence, that there is19
no substantial value in the property in excess of the mortgage debt found by20
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VT LEG 266061.1
the court to be due to the plaintiff and any other lienholder, plus assessed but1
unpaid property taxes due on the property.2
(d) If a decree is issued foreclosing the right of redemption without sale,3
the time of redemption shall be no more than six months from the date of the4
decree unless a shorter time is ordered, or the mortgagor and mortgagee5
plaintiff agree to a shorter period. The court shall fix the period of redemption6
taking into consideration whether there is value in the property in excess of the7
mortgage debt and debt owed to junior lienholders, any assessed but unpaid8
property taxes, the condition of the property, and any other equities.9
(e) If the premises are not redeemed agreeably to the decree, the clerk of10
the court shall issue a writ of possession at the plaintiff’s request. Such writ11
shall have the same force and effect and be executed in the same manner as12
similar writs issued after judgment by a court of law in ejectment proceedings.13
Where the premises are occupied by a residential tenant, the writ shall be14
served on the tenant, and no sooner than 30 days after the writ is served, the15
plaintiff shall be placed in possession of the property without further16
proceedings.17
(f)(1) In an action for foreclosure under this section, if a lien or interest in18
such realty is held by any person or federal agency which may not be19
foreclosed by strict foreclosure pursuant to federal law, the court shall proceed20
in accordance with subchapter 3 of this chapter.21
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VT LEG 266061.1
(2) In an action for foreclosure, if a lien or interest in such realty is held1
by any person or federal agency which may not be foreclosed by strict2
foreclosure pursuant to federal law, a decree may be entered providing for such3
period of redemption as the court may determine, and providing for a sale of4
the mortgaged premises at the conclusion of such period if the premises are not5
redeemed, and for the time, manner, and notice of sale, if required, and the6
application of any proceeds.7
(g) In an action for foreclosure under this section, where the time of8
redemption has expired, the party obtaining the foreclosure shall cause to be9
recorded in the office where by law a deed of the lands is required to be10
recorded, within 30 days after the expiration of the time of redemption, a11
certified copy of the judgment and the certificate of nonredemption.12
(h) The expiration of the right of redemption under the decree shall not13
foreclose the interest of subsequent purchasers, mortgagees, or attaching14
creditors whose interest in the property being foreclosed first arose after the15
filing of the complaint for foreclosure in the land records as provided in section16
4932 of this chapter, unless the plaintiff complies with subsection (g) of this17
section.18
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VT LEG 266061.1
Subchapter 3. Foreclosure by Judicial Sale1
§ 4945. JUDICIAL SALE FORECLOSURE2
(a) All liens and mortgages affecting real property may, on the written3
motion of any party to any suit for foreclosure of such liens or mortgages, or at4
the discretion of the court before which the foreclosure proceedings are5
pending, be foreclosed by a judicial foreclosure sale, even if the mortgage does6
not contain a sale provision instead of a strict foreclosure.7
(b) In an action for foreclosure, if a lien or interest in such realty is held by8
any person or federal agency which may not be foreclosed by strict foreclosure9
pursuant to federal law, a decree may be entered providing for such period of10
redemption as the court may determine, and providing for a sale of the11
mortgaged premises at the conclusion of such period if said premises are not12
redeemed, and for the time, manner, and notice of sale, if required, and the13
application of the proceeds therefrom.14
§ 4946. PROCEDURE15
(a) Order for judicial sale. Unless strict foreclosure is ordered pursuant to16
section 4941 of this title, the court shall, upon entry of a decree of foreclosure,17
order that the mortgaged property be sold at public sale if it is not redeemed18
within the time period allowed by the court. The time and manner of the sale19
shall be specified in the notice of sale required by section 4952 of this title.20
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VT LEG 266061.1
(b) Time for redemption; owner-occupied dwelling or farmland. If a1
decree is made foreclosing the right of redemption by judicial sale with respect2
to farmland or a dwelling house of four units or fewer that is currently3
occupied by the owner as his or her principal residence at the time the plaintiff4
applies for entry of judgment, the time of redemption shall be established by5
the court and shall be no more than six months from the date of the decree.6
The court shall fix the period of redemption taking into consideration whether7
there is value in the mortgaged property in excess of the mortgage debt and8
debt owed to junior lienholders, any assessed but unpaid property taxes, the9
condition of the mortgaged property, and any other equities. No sale of a10
dwelling house of four units or fewer when currently occupied by the owner as11
his or her principal residence at the time the plaintiff applies for entry of12
judgment may take place within seven months of service of the foreclosure13
complaint, unless the court orders a shortened redemption period pursuant to14
this section or the plaintiff and the mortgagor mutually agree to a shorter15
period after commencement of the action to foreclose the mortgage.16
(c) Time for redemption; other property. If a decree is made foreclosing the17
right of redemption by judicial sale with respect to any property other than18
farmland or a dwelling house of four units or fewer that is currently occupied19
by the owner as his or her principal residence at the time the plaintiff applies20
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VT LEG 266061.1
for entry of judgment, the redemption period shall be eliminated or reduced by1
the court to no more than 30 days.2
(d) Writ of possession. Upon expiration of the period of redemption, if the3
mortgagor or the mortgagor’s successors, heirs, or assigns have not redeemed4
the mortgage, any remaining rights of the mortgagor to possession shall5
terminate, and the clerk of the court shall issue a writ of possession at the6
plaintiff’s request. Such writ shall have the same force and effect and be7
executed in the same manner as similar writs issued after judgment by a court8
of law in ejectment proceedings. Where the mortgaged property is occupied9
by a residential tenant, the writ shall be served on the tenant, and no sooner10
than 30 days after the writ is served, the plaintiff shall be placed in possession11
of the mortgaged property without further proceedings.12
§ 4947. FORECLOSURE OF EQUITY OF REDEMPTION-RECORDING13
In an action for foreclosure under this subchapter where the time of14
redemption has expired, the party obtaining the foreclosure shall cause to be15
recorded in the office where by law a deed of the lands is required to be16
recorded, within 30 days after the expiration of the time of redemption, a17
certified copy of the judgment and the certificate of nonredemption.18
§ 4948. REINSTATEMENT OF MORTGAGE PRIOR TO SALE19
(a) Upon agreement of the parties, the mortgagor may reinstate the loan20
after the expiration of the redemption period set forth in the judgment order but21
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VT LEG 266061.1
before the public sale. To reinstate the loan, the mortgagee shall execute a1
waiver of foreclosure and, after receiving court approval, record it in the land2
records of the city or town where the mortgaged property lies. Upon3
recording, the waiver of foreclosure shall operate to terminate the foreclosure4
and restore the parties and all junior lienholders to the positions they held prior5
to the filing of the foreclosure.6
(b) The following form of waiver of foreclosure may be used. Nothing7
herein shall be construed to prevent the use of other forms or to prevent8
alteration of the form as circumstances require:9
WAIVER OF FORECLOSURE10
MORTGAGEE, holder of record of a mortgage deed dated ________, 20____11
and of record in Book ___ at Page ____ of the City/Town of __________12
Land Records (“the Mortgage”) executed and delivered to it by13
MORTGAGOR(S) covering real estate located in the Town of _________ ,14
Vermont hereby acknowledges and agrees:15
1. For the breach of the condition of the Mortgage, MORTGAGEE16
initiated a foreclosure action against MORTGAGOR by Complaint for17
Foreclosure dated _____________, 20____ which is of record in Book18
_____at Page _____ of the Town of _____ Land Records.19
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VT LEG 266061.1
2. That MORTGAGOR(S) has/have now cured the default and requested1
reinstatement of the Mortgage and the MORTGAGEE agrees to2
reinstate.3
NOW THEREFORE, MORTGAGEE does hereby acknowledge that it has4
received payment of the arrearages due it under the Mortgage and the5
promissory note which it secures, and in consideration thereof, does hereby6
waive the above-entitled foreclosure action and release unto said7
MORTGAGOR, his/her/its heirs, personal representatives, successors, and8
assigns, all claims asserted in the foreclosure action. THE MORTGAGE IS9
NOT DISCHARGED.10
This waiver is given pursuant to 12 V.S.A. § 4948. This waiver shall have no11
effect on the Mortgage referenced above other than to reinstate the same, and12
the rights of all parties named in the foreclosure action, as well as the rights of13
any junior lienholders, remain intact as if no foreclosure had been commenced.14
IN WITNESS WHEREOF, the said MORTGAGEE has caused this instrument15
to be executed by its duly authorized agent this ____ day of ________ , 20___.16
MORTGAGEE17
By: _____________________________________18
Its Duly Authorized Agent19
Printed Name: _______________________20
State of _____________21
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VT LEG 266061.1
County of ____________________1
At _________________ in said County and State, then personally appeared the2
above-named duly authorized agent who acknowledged the foregoing waiver3
of foreclosure to be his/her free act and deed and the free act and deed of the4
MORTGAGEE.5
Before me, _______________________6
Printed Name:__________________________7
Notary Public8
My Commission expiration ____________________9
*****************************************************10
The request for waiver of foreclosure is SO ORDERED this ____ day11
of _________________________, 20 ____.12
______________________________13
Superior Court Judge14
§ 4949. REDEMPTION PRIOR TO JUDICIAL SALE15
(a) The mortgagor is entitled to redeem the premises at any time prior to16
the sale by paying the full amount due under the judgment order.17
(b) Upon agreement of the parties, the mortgagor may redeem the premises18
at any time prior to the sale by paying less than the full amount due under the19
judgment order. In such case, the parties to the foreclosure shall, with court20
approval, amend the redemption amount. Upon payment of the amended21
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VT LEG 266061.1
redemption amount, the court shall issue a Supervening Certificate of1
Redemption as evidence that the judgment amount was redeemed. Upon the2
recording of a certified copy of the Certificate of Redemption in the land3
records, the foreclosed mortgage shall be of no further force or effect and any4
junior lienholder shall return to the position it held prior to the filing of the5
foreclosure.6
§ 4950. DEED IN LIEU OF FORECLOSURE7
In lieu of proceeding under section 4946 of this title, the mortgagor may8
convey the mortgaged property to the mortgagee. In such case, the rights of all9
parties named in the foreclosure action, as well as the rights of any junior10
lienholders, remain intact as if no foreclosure had been commenced.11
§ 4951. JUDGMENT VACATED12
Notwithstanding any provision to the contrary in this chapter or other law,13
parties who have entered an appearance in the foreclosure may stipulate and14
move to vacate the judgment at any time prior to the auction. If the court15
approves the motion, the judgment shall be vacated and the parties, the16
property, and any lienholders of record in the land records will be restored to17
their original positions as if no foreclosure had been commenced and no18
judgment entered. This section will apply retroactively and apply to orders to19
vacate in existence on the effective date of this section.20
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VT LEG 266061.1
§ 4952. SALE PROCEDURES1
(a) Generally. If the mortgaged property is not redeemed, the plaintiff shall2
sell the mortgaged property in accordance with this section, complying with all3
court orders and applicable power of sale provisions.4
(b) Notice of sale; publication. Notice of sale shall be published once in5
each of three successive weeks in a newspaper of general circulation in the6
town where the land lies, the first publication to be no fewer than 21 days7
before the day of sale.8
(c) Notice of sale; service. A copy of the notice of sale shall be mailed by9
first class mail, postage prepaid, to all parties who appeared in the foreclosure10
action or to their attorneys of record. If the mortgagor has not appeared in the11
foreclosure action, a copy of the notice of sale shall also be mailed by first12
class mail, postage prepaid, to the mortgagor at the mortgagor’s last known13
address. The notice of sale shall be mailed no fewer than 21 days before the14
date of sale.15
(d) Notice of sale; waiver. No foreclosure sale shall be invalid or16
ineffectual to foreclose a mortgage pursuant to this section if any party entitled17
to be sent notice, either before or after such foreclosure sale, waives its rights18
to such notice.19
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VT LEG 266061.1
(e) Notice of sale; form. The following form of notice of sale may be used1
and may be altered as circumstances require, but nothing herein shall be2
construed to prevent the use of other forms:3
By virtue and in execution of the Power of Sale contained in a certain4
mortgage given by ______________ to _______________dated5
______________________ and recorded in Volume ______, Page _________6
of the land records of the municipality of ______________, of which7
mortgage the undersigned is the present holder (if by assignment, or in any8
fiduciary capacity, give reference) for breach of the conditions of said9
mortgage and for the purpose of foreclosing the same will be sold at Public10
Auction at _______________ (place) at ______ o’clock , ___M. on the11
_______day of _________, 20____all and singular the premises described in12
said mortgage,13
(In case of partial releases, state exceptions.)14
To wit: (Legal description of the premises.)15
Terms of sale: (State here the amount, if any, to be paid in cash by the16
purchaser at the time of the sale, and the schedule for payment of the balance17
and other terms of sale.)18
The mortgagor is entitled to redeem the premises at any time prior to the sale19
by paying the full amount due under the mortgage, including the costs and20
expenses of the sale.21
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VT LEG 266061.1
Other terms to be announced at the sale or inquire at __________1
Signed: ____________________________2
Mortgagee (may be signed by mortgagee’s attorney)3
Dated: ________________________________, 20____.4
§ 4953. CONDUCT AND LOCATION OF SALE5
(a) Location. The sale shall be held at the mortgaged property unless6
another place for sale is directed by the court. At the sale, the mortgaged7
property shall be sold to the highest bidder in conformance with the terms of8
sale set forth in the notice of sale.9
(b) Adjournments. The public sale may be adjourned one or more times for10
a total time not exceeding 30 days, without further court order, and without11
publication or service of a new notice of sale, by announcement of the new sale12
date to those present at each adjournment or by posting notice of the13
adjournment in a conspicuous place at the location of the sale. The public sale14
may be adjourned for a period of time in excess of 30 days by agreement of the15
mortgagor and mortgagee or by order of the court.16
(c) Permitted bidders. Permitted bidders at the sale may include, without17
limitation, the mortgagee, the mortgagor, or any lien holder. All bidders,18
except for the mortgagee plaintiff, must meet the requirements set forth in the19
notice of sale in order to bid at the sale.20
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VT LEG 266061.1
§ 4954. PROCEDURE FOLLOWING SALE1
(a) Confirmation order. Following the sale, the plaintiff shall file with the2
court a report on oath of the sale, together with a request for confirmation of3
the sale, which shall include an accounting of the sale proceeds, and a4
proposed order confirming the sale. Copies of the report of the sale and5
request for confirmation shall be mailed by first class mail, postage prepaid, to6
all parties who appeared in the foreclosure action or to their attorneys of record7
and to the mortgagor at the mortgagor’s last known address. If no objections8
to the request for confirmation are filed within 15 days after it is filed, the9
court may issue an order of confirmation of the sale without hearing, unless the10
court in its discretion determines that a hearing is necessary. The order of the11
court confirming the sale shall be conclusive evidence as against all persons12
that the foreclosure and sale were conducted in accordance with this section.13
(b) Transfer of title. The confirmation order shall be recorded in the land14
records of the town where the mortgaged property is located and shall transfer15
title to the mortgaged property to the purchaser upon recording.16
(c) Disbursement of proceeds. In the event that the proceeds of the sale,17
after first deducting the reasonable expenses incurred in making the sale,18
exceed the amounts due to the plaintiff at the time of sale, the confirmation19
order shall provide for the payment of the surplus to other lienholders of record20
in the order of the priority of their liens. In the event that the proceeds of the21
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VT LEG 266061.1
sale exceed the amount due to the plaintiff and the amount due to the other1
defendants, the excess shall be paid to the defendant mortgagor. If the plaintiff2
is the high bidder at the sale, and the plaintiff’s bid exceeds the amount due to3
the plaintiff at the time of the sale, the plaintiff shall not be required to pay any4
surplus to the other lienholders or to the defendant mortgagor.5
(d) Deficiency. Unless the mortgaged property is farmland as defined in6
subdivision 4931(3) of this title or a dwelling house of two units or fewer that7
is currently occupied by the owner as his or her principal residence, the8
plaintiff may request a deficiency judgment in the foreclosure complaint. The9
court shall assess a judgment against the mortgagor for the deficiency if the10
proceeds of sale are insufficient to meet the expenses incurred in making the11
sale and the amount due to the plaintiff. Nothing in this section shall preclude12
the plaintiff from maintaining a subsequent action against the mortgagor for13
the deficiency if a deficiency judgment is not requested in the foreclosure14
complaint or if the request is withdrawn without prejudice prior to, or at the15
same time as, the request for confirmation of the sale.16
(e) Failure of sale; resale. In the event that the purchaser fails to pay the17
balance of the purchase price according to the terms of the sale, then, upon the18
request of the plaintiff, the down payment shall be forfeited, the foreclosure19
sale shall be void, the court shall issue an order vacating the confirmation20
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VT LEG 266061.1
order, and the plaintiff shall conduct a new sale in accordance with this1
subchapter.2
Subchapter 4. Foreclosure by Nonjudicial Sale3
§ 4961. POWER OF NONJUDICIAL SALE4
Whether or not a power of sale is contained in a mortgage relating to any5
property, except for farmland or a dwelling house of four units or less when6
currently occupied, at the time of service of the notice of sale pursuant to7
section 4964 of this title, by the owner as his or her principal residence, instead8
of a suit and decree of foreclosure, the mortgagee may, upon breach of9
mortgage condition, foreclose upon the property without first commencing a10
foreclosure action or obtaining a foreclosure decree by complying with the11
terms of this subchapter. No sale under and by virtue of a nonjudicial power of12
sale shall be valid and effectual to foreclose the mortgage unless the conditions13
of this subchapter are complied with.14
§ 4962. NOTICE OF INTENTION TO FORECLOSE15
(a) At least 30 days prior to service of a notice of sale pursuant to16
subsection 4952(c) of this title, notice of intention to foreclose in a writing17
complying with this section shall be sent to the mortgagor by registered or18
certified mail at his or her last known address.19
(b) The writing required by this section shall state, in a manner calculated20
to make the mortgagor aware of the situation:21
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VT LEG 266061.1
(1) the mortgage to be foreclosed;1
(2) the mortgage condition claimed to have been breached;2
(3) that the mortgagee has accelerated maturity of the debt secured by3
the mortgage, if that is the case;4
(4) the amount to be paid or other action necessary to cure, and the time5
within which the cure must take place, which shall be not less than 30 days6
after the date of the notice of intention to foreclose;7
(5) the intention of the mortgagee to foreclose by exercising the power8
of sale contained in the mortgage, if the breach of the mortgage condition is9
not cured within the time and in the manner specified in the notice; and10
(6) that the mortgagor will be entitled to be sent notice of the foreclosure11
sale at least 60 days prior to the sale and to redeem the mortgaged property at12
any time prior to the sale by paying the full amount due under the mortgage,13
including the costs and expenses of the sale.14
(c)(1) The following notice of intent to foreclose form may be used and15
may be altered as circumstances require:16
PLEASE TAKE NOTICE that you have defaulted under Loan No.17
__________ by [mortgage condition breached] required by your Promissory18
Note dated __________, 20___. This default also constitutes a breach of the19
Mortgage, dated __________, 20___, recorded in Volume ___ at Page ___ of20
the Land Records, which secures the Loan. As a result of your default, we21
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VT LEG 266061.1
have accelerated the maturity of all indebtedness due on the Loan and secured1
by the Mortgage, totaling $__________ as of today’s date. In order to cure2
this default, you must pay to us on or before __________ [a date not less than3
thirty (30) days after the date of this Notice] the sum of $__________, plus4
interest at the rate of $__________ per day to the date of payment. If you do5
not cure this default by making the payments required, it is our intention to6
foreclose by exercising the power of sale contained in the above Mortgage.7
You will be sent notice of the foreclosure sale at least sixty (60) days prior to8
the sale, and you will be entitled to redeem your interest in the mortgaged9
property at any time prior to the sale by paying the full amount due under the10
Mortgage, including the costs and expenses of the sale. If you do not cure the11
default or redeem your interest, your ownership of the mortgaged property will12
be terminated.13
(2) This subsection shall not be construed to prevent the use of other14
forms except that all notices shall comply with the provisions of subsection (b)15
of this section.16
§ 4963. PUBLICATION OF NOTICE OF SALE17
Notice of a sale conducted pursuant to this subchapter shall be published18
once in each of three successive weeks, in a newspaper of general circulation19
in the town where the land lies, the first publication to be not less than 21 days20
before the day of sale.21
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VT LEG 266061.1
§ 4964. RECORDING1
The mortgagee shall record the notice of sale in the land records of the town2
or city where the land lies not less than 60 days prior to the sale. The filing of3
the notice of the sale shall be in lieu of filing a foreclosure complaint under4
section 4932 of this title and shall be sufficient notice of the pendency of the5
nonjudicial foreclosure by power of sale to all persons who acquire any interest6
or lien in the mortgaged property between the dates of recording the notice of7
sale and recording the foreclosure deed. Without further notice or service,8
those persons shall be bound by the power of sale and the foreclosure deed and9
shall be foreclosed from all rights or equity in the mortgaged property.10
§ 4965. SERVICE; FORM11
(a)(1) In all cases, unless service is waived under subsection 4966(g) of this12
title, a copy of the notice of sale shall be served on the mortgagor or his or her13
representative in interest by:14
(A) sending the notice by registered or certified mail addressed to the15
mortgagor or such representative at his or her last known address, or to such16
person and address as may be agreed upon in said mortgage, at least 60 days17
before said sale; or18
(B) serving the notice in any manner authorized by the Vermont19
Rules of Civil Procedure.20
(2) As used in the section, “mortgagor” shall mean the mortgagor or the21
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VT LEG 266061.1
then record owner of the mortgaged property.1
(b)(1) A copy of the notice of sale shall be sent to any tenant lawfully2
occupying the mortgaged property and to any person having a recorded interest3
in the mortgaged property of record which will be foreclosed by the sale,4
provided that the interest is recorded in the applicable land records prior to the5
recording of the notice of sale. The notice required by this subsection shall be6
sent not less than 60 days before the sale. Notice to a tenant shall be sufficient7
if mailed to the tenant by first class mail at the address specified in the lease, if8
recorded, or to the occupant at the address of the mortgaged property, if the9
lease is not recorded.10
(2) Compliance with this subsection shall be sufficient with respect to11
persons entitled to receive notice under subdivision (1) of this subsection, and12
the failure to give additional notice shall not be grounds to invalidate the sale.13
Any mortgagor or junior lienholder who refuses to accept or claim mailed or14
served notice or who frustrates attempts by the mortgagee to give notice of the15
sale by failing to give or leave a forwarding address or by other acts or16
omissions shall be deemed to be notified of the sale, provided that such17
mortgagee shall have made a good faith effort to provide such notice.18
(c)(1) The following notice of sale form may be used and may be altered as19
circumstances require:20
By virtue and in execution of the Power of Sale contained in a certain21
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VT LEG 266061.1
mortgage given by __________ to __________ dated __________ and1
recorded in Volume __________ Page __________ of the land records of the2
town of __________, of which mortgage the undersigned is the present holder,3
(if by assignment, or in any fiduciary capacity, give reference) for breach of4
the conditions of said mortgage and for the purpose of foreclosing the same5
will be sold at Public Auction at __________ o’clock, ___ M. on the6
__________ day of __________ 20____, (place) __________ at the mortgaged7
property.8
To wit: (Legal description of the mortgaged property and in case of partial9
releases, state exceptions.)10
Terms of sale: (State here the amount, if any, to be paid in cash by the11
purchaser at the time of the sale, and the schedule for payment of the balance.)12
The mortgagor and all junior lienholders are entitled to redeem the mortgaged13
property at any time prior to the sale by paying the full amount due under the14
mortgage, including the costs and expenses of the sale.15
Other terms to be announced at the sale or inquire at __________16
(Signed) _________________________________17
Mortgagee (may be signed by mortgagee’s attorney)18
__________ 20__19
(2) This subsection shall not be construed to prevent the use of other20
forms. A notice of sale shall be sufficient if it fully sets forth the date, time,21
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VT LEG 266061.1
and place of sale; the town, county, street or highway and street number, if1
any, of the mortgaged premises; the date of the mortgage; the volume and page2
of the recording of the mortgage; the terms of the sale; the statement language3
required by subdivision (d)(1) of this section; and notice of the right to redeem.4
(d)(1) The notice of the sale shall include the following statement: “The5
mortgagor and all junior lienholders are hereby notified that at any time before6
the foreclosure sale, the mortgagor and all junior lienholders have a right to7
petition the superior court for the county in which the mortgaged property is8
situated, with service upon the mortgagee, and upon such bond as the court9
may require, to enjoin the scheduled foreclosure sale. Failure to institute such10
petition and complete service upon the foreclosing party, or the party’s agent,11
conducting the sale prior to sale shall thereafter bar any action or right of12
action of the mortgagor or any junior lienholder based on the validity of the13
foreclosure, the right of the mortgagee to conduct the foreclosure sale, or14
compliance by the mortgagee with the notice requirements and other15
conditions of this section. An action to recover damages resulting from the16
sale of the mortgaged property on the date of the sale may be commenced at17
any time within one year following the date of the sale, but not thereafter.”18
(2) The mortgagor and all junior lienholders shall have the rights19
contained in the notice provided for in this subsection.20
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VT LEG 266061.1
§ 4966. CONDUCT AND LOCATION OF SALE1
(a) The sale shall be held at the mortgaged property except that it may be2
held elsewhere if agreed to in writing by the mortgagor and the mortgagee not3
less than 60 days nor more than 90 days before the sale. At the sale, the4
mortgaged property shall be sold to the highest bidder in conformance with the5
terms of sale set forth in the foreclosure notice.6
(b) The mortgagor shall be entitled to redeem the mortgaged property at7
any time prior to the sale by paying to the mortgagee the full amount due under8
the mortgage, including the costs and expenses of the sale.9
(c) The public sale may be adjourned one or more times for a total time not10
exceeding 60 days by announcement of the new sale date to those present at11
each adjournment or by posting notice of the adjournment in a conspicuous12
place at the location of the sale. Written notice of the new sale date shall also13
be given by first class mail, postage prepaid, to any person who received notice14
of the sale pursuant to section 4965 of this title.15
(d) Permitted bidders at the sale shall include, without limitation, the16
mortgagee, the mortgagor, or any subsequent lien holder. All bidders, except17
for the mortgagee, shall meet the requirements set forth in the notice of sale in18
order to bid at the sale.19
(e) In the event that the proceeds of sale, after first deducting the20
reasonable expenses incurred in making the sale, exceed the amounts due to21
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VT LEG 266061.1
the mortgagee at the time of sale, the surplus shall be paid to other lien holders1
of record in the order of the priority of their liens. In the event that the2
proceeds of sale exceed the amount due to the mortgagee and the amounts due3
to the other lien holders, the excess shall be paid to the mortgagor. The4
mortgagee or person conducting the sale may interplead any sale proceeds in5
excess of the indebtedness and expenses secured by the mortgage in the event6
there are any liens of record against the real estate.7
(f) This section shall not preclude the mortgagee from maintaining a8
subsequent action against the mortgagor for any deficiency.9
(g) No foreclosure sale shall be invalid or ineffectual to foreclose a10
mortgage under this section if, before or after the foreclosure sale, a party11
entitled to receive notice of the sale waives his or her right to such notice. A12
waiver of notice authorized or validated under this section shall be recorded in13
the land records in the town or city where the property is located.14
§ 4967. RECORDING FOLLOWING SALE15
(a) Within 90 days after the sale, the mortgagee selling pursuant to the16
power shall cause the foreclosure deed and an accompanying affidavit to be17
recorded in the land records of the town where the property is situated. The18
affidavit setting forth fully and particularly the mortgagee’s acts with respect to19
the sale of the mortgaged property, including the dates that notices of the sale20
were published, and shall set forth facts showing that no person in interest is in21
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VT LEG 266061.1
the military service as defined in the Service Members Civil Relief Act of1
2003. The affidavit or a duly certified copy thereof shall be admissible in2
evidence on the issue of whether the power of sale was duly executed.3
(b) If the recording required by this section is prevented by an order or stay4
of any court, the time for such recording shall be extended until 10 days after5
the expiration or removal of such order or stay.6
(c) If the recording required by this section is made more than 60 days after7
the sale, the affidavit shall state why the recording was not made earlier.8
(d) Failure to record the deed and affidavit within the statutory period9
required by this subsection shall render the sale void and of no effect only as to10
liens or other encumbrances of record intervening between the day of the sale11
and the time of recording of said deed and affidavit.12
(e) Correction of error. In case of an alleged error or omission in the13
affidavit, the court, on petition and after notice to interested parties, may14
validate the affidavit or authorize the recording of an affidavit amending,15
correcting or in substitution for an affidavit so recorded, and the affidavit so16
authorized to be recorded or a certified copy of the record thereof shall have17
the same effect and shall be admitted in evidence as if it had been recorded18
within the 90-day period required by this section.19
§ 4968. TRANSFER OF TITLE20
Title to the foreclosed mortgaged property under this section shall not pass21
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VT LEG 266061.1
to the purchaser until the time of the recording of the deed and affidavit. Upon1
such recording, title to the mortgaged property shall pass to the purchaser free2
and clear of all interests and encumbrances which do not have priority over3
such mortgage.4
§ 4969. FAILURE OF SALE, RESALE5
If the purchaser does not pay the balance of the purchase price according to6
the terms of the sale, and at the option of the mortgagee, the down payment, if7
any, shall be forfeited and the foreclosure sale shall be void.8
§ 4970. FORM AND EFFECT OF FORECLOSURE DEED9
(a) The foreclosure deed shall be in substantially the following form:10
__________ of __________ County, __________ State of __________, holder11
of a mortgage from __________ to __________ dated __________, recorded12
in __________ Book___ at Page___ of the Town of ____ Land Records, by13
the power conferred by said mortgage and every other power, for___ dollars14
paid, grant to __________, (complete mailing address) __________, of15
__________Street, Town (City) of __________, __________ County, State of16
__________, the premises conveyed by said mortgage.17
(Here add acknowledgment)18
(b) A deed substantially in the form set forth in subsection (a) of this19
section shall, when duly executed and delivered, have the force and effect of a20
deed in fee simple to the grantee, heirs, successors and assigns, to their own21
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VT LEG 266061.1
use, with covenants on the part of the mortgagee, for himself or herself, that, at1
the time of the delivery of such deed, the mortgagee was duly authorized to2
make sale of the mortgaged property; that in all of the mortgagee’s3
proceedings in the sale thereof, the mortgagee has complied with the4
requirements of this subchapter; and that the mortgagee will warrant and5
defend the same to the grantee, heirs, successors, and assigns against the lawful6
claims of all persons claiming by, from, or under him or her.7
Sec. 2. REPEAL8
Subchapter 6 of Chapter 163 of Title 12 (foreclosure of mortgages) is9
repealed.10
Sec. 3. EFFECTIVE DATE; APPLICABILITY11
This act shall take effect on July 1, 2011 and shall apply to any mortgage12
foreclosure proceeding instituted after that date.13
Sec. 1. 12 V.S.A. chapter 172 is added to read:
CHAPTER 172. FORECLOSURE OF MORTGAGES
Subchapter 1. General Provisions
§ 4931. DEFINITIONS
As used in this chapter:
(1) “Agricultural activity” includes the growing, raising, and
production of horticultural and silvicultural crops, grapes, berries, trees, fruit,
poultry, livestock, grain, hay, and dairy products.
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VT LEG 266061.1
(2) “Dwelling house” means a residential structure or mobile home
which contains one to four family housing units, or individual units of
condominiums or cooperatives, each of which is used or intended to be used as
a residence.
(3) “Farmland” means land devoted primarily to commercial
agricultural activities.
(4) “Value” means market value less all reasonable expenses that
would be incurred in selling the property. Market value for purposes of this
section may be determined based on evidence of market value deemed by the
court to be reasonably reliable, which may include grand list valuation and the
common level of appraisal used in the town where the property is located, if
the court finds such evidence to be reasonably reliable.
§ 4932. VENUE; JOINDER OF PARTIES; RECORDING
(a) Actions to foreclose a mortgage under subchapter 2 or 3 of this chapter
shall be brought in the civil division of the superior court for the county where
the land lies, or, if the land described in the mortgage lies in more than one
county, then in one of the counties in which the land lies.
(b) The plaintiff shall file a copy of the complaint in the town clerk’s office
in each town where the mortgaged property is located. The clerk of the town
shall minute on the margin of the record of the mortgage that a copy of
foreclosure proceedings on the mortgage is filed. The filing shall be sufficient
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VT LEG 266061.1
notice of the pendency of the action to all persons who acquire any interest or
lien on the mortgaged premises between the dates of filing the copy of
foreclosure and the recording of the final judgment in the proceedings.
Without further notice or service, those persons shall be bound by the
judgment entered in the cause and be foreclosed from all rights or equity in the
premises as completely as though they had been parties in the original action.
(c) If the mortgaged property is subject to a residential rental agreement,
as defined in 9 V.S.A. § 4451:
(1) The plaintiff shall join as a party defendant any person occupying
the mortgaged property pursuant to a residential rental agreement as of the
date the copy of the complaint is recorded in the land records. Service of the
complaint on the tenant shall be sufficient if mailed to the tenant by first class
mail at the address specified in the rental agreement, if the agreement is
recorded, or to the “occupant” at the address of the leased premises if the
agreement is not recorded.
(2) The summons and complaint served on any person occupying the
premises pursuant to a residential rental agreement shall contain the following
notice, written in at least 14-point type:
THE PROPERTY IN WHICH YOU LIVE IS BEING FORECLOSED
UPON. YOU ARE NAMED AS A DEFENDANT IN THE
FORECLOSURE BECAUSE YOUR RIGHT TO REMAIN ON THE
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VT LEG 266061.1
PREMISES MAY END WHEN THE FORECLOSURE IS
COMPLETED. YOU MUST NOTIFY THE COURT OF YOUR
NAME AND ADDRESS IN ORDER TO BE KEPT INFORMED OF
THE STATUS OF THE FORECLOSURE.
(3) Upon receipt of the complaint, the owner of the mortgaged property
shall notify each tenant who enters into a residential rental agreement that the
premises are the subject of a pending foreclosure action and that, in the event
the owner is unable to redeem the premises, the tenant may be required to
vacate the premises upon 30 days’ notice, or upon such other notice as is
required by federal law, whichever is longer. The failure of the owner to
provide notice under this subsection shall not affect or invalidate the
foreclosure action.
(d) All proceedings shall be before the superior judge alone, and trial shall
be without jury.
§ 4933. NOTICE TO COMMISSIONER OF BANKING, INSURANCE,
SECURITIES, AND HEALTH CARE ADMINISTRATION
(a) When the mortgage holder files an action under subchapter 2 or 3 of
this chapter to foreclose upon an owner-occupied dwelling house, the
mortgage holder shall simultaneously file a notice of foreclosure with the
commissioner of banking, insurance, securities, and health care
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VT LEG 266061.1
administration. The commissioner may require that the notice of foreclosure
be sent in an electronic format. The notice of foreclosure shall include:
(1) the name and current mailing address of the mortgagor;
(2) the address of the property being foreclosed;
(3) the name of the current mortgage holder, along with the address and
telephone number of the person or entity responsible for workout negotiations
concerning the mortgage;
(4) the name of the original lender, if different;
(5) the name, address, and telephone number of the mortgage servicer,
if applicable; and
(6) any other information the commissioner may require.
(b) The court clerk shall not accept a foreclosure complaint for filing
without a certification by the plaintiff that the notice of foreclosure has been
sent to the commissioner of banking, insurance, securities, and health care
administration in accordance with subsection (a) of this section.
(c) Acceptance of a foreclosure complaint by the court clerk that, due to a
good faith error or omission by the plaintiff or the clerk, does not contain the
certification required in subsection (a) of this section shall not invalidate the
foreclosure proceeding, provided that the plaintiff files the required notice
with the commissioner within 10 days of obtaining knowledge of the error or
omission.
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VT LEG 266061.1
§ 4934. SUPPLEMENTAL JUDGMENT JOINING PARTIES; RECORDING
At any time, without further notice or service on the purchaser or
mortgagor or lienholder whose interest in the property being foreclosed first
arose after the filing of the complaint in the town clerk’s office, and upon filing
certified copies of the deed, mortgage, or attachment with the clerk of the court
by the plaintiff in the foreclosure action, any superior judge may sign a
supplemental judgment specifically naming that party. Reference to the deed,
mortgage, or lien and the supplemental judgment may be filed in the town
clerk’s office for record, and it shall have the same force and effect as though
that person had been made a party defendant in the original action.
§ 4935. TAXES PAID BY MORTGAGEE
A tax assessed upon mortgaged real estate in this state may be paid by the
mortgagee or assignee of the mortgage upon such property. The amount so
paid, including costs, if any, shall thereupon be added to and become a part of
the debt or obligation secured by such mortgage.
§ 4936. FORECLOSURE OF REAL OR PERSONAL PROPERTY
A mortgage or a security agreement constituting a lien on both real and
personal property to secure the payment of a debt, whether evidenced by one
or more instruments, may be foreclosed in an action under subchapter 2 or 3
of this chapter.
§ 4937. ATTORNEY’S FEES
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VT LEG 266061.1
When a mortgage contains an agreement on the part of the mortgagor to
pay the mortgagee, in the event of foreclosure, the attorney’s fees incident
thereto, and claim is made therefor in the complaint, upon hearing, the court
in which the complaint is brought shall allow such fee as in its judgment is
just.
§ 4938. EFFECT ON BANKRUPTCY PROCEEDINGS
Nothing in this chapter shall be construed to supersede any provision of
Title 11 of the United States Code.
§ 4939. APPEALS
When a judgment is for the foreclosure of a mortgage, permission of the
court shall be required for review.
Subchapter 2. Strict Foreclosure
§ 4941. DECREE FORECLOSING EQUITY OF REDEMPTION; WRIT OF
POSSESSION
(a) In any action for foreclosure with regard to any mortgage encumbering
property, the court may, if no sale is requested by the plaintiff or ordered by
the court pursuant to subsection (b) of this section, issue a judgment and
decree of foreclosure without requiring a judicial sale of the premises.
(b) In an action brought under subsection (a) of this section, any party may
by written motion request, or the court in its discretion may order, that
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VT LEG 266061.1
property be sold at a judicial foreclosure sale, whether or not the mortgage
contains a power of sale.
(c) No decree foreclosing the right of redemption without sale shall be
issued absent a finding by the court that there is no substantial value in the
property in excess of the mortgage debt found by the court to be due to the
plaintiff and any other lienholder, plus assessed but unpaid property taxes due
on the property. The court shall include in its order a summary of the evidence
upon which its finding is based.
(d) If a decree is issued foreclosing the right of redemption without sale,
the time of redemption shall be six months from the date of the decree unless a
shorter time is ordered, or the mortgagor and mortgagee plaintiff agree to a
shorter period. The court shall fix the period of redemption taking into
consideration whether there is value in the property in excess of the mortgage
debt and debt owed to junior lienholders, any assessed but unpaid property
taxes, the condition of the property, and any other equities.
(e) If the premises are not redeemed agreeably to the decree, the clerk of
the court shall issue a writ of possession at the plaintiff’s request. Such writ
shall have the same force and effect and be executed in the same manner as
similar writs issued after judgment by a court of law in ejectment proceedings.
Where the premises are occupied by a residential tenant, the writ shall be
served on the tenant, and the plaintiff shall be placed in possession of the
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VT LEG 266061.1
property without further proceedings no sooner than 30 days after the writ is
served, or upon such other time as is required by federal law, whichever is
longer.
(f)(1) In an action for foreclosure under this section, if a lien or interest in
such realty is held by any person or federal agency which may not be
foreclosed by strict foreclosure pursuant to federal law, the court shall
proceed in accordance with subchapter 3 of this chapter.
(2) In an action for foreclosure, if a lien or interest in such realty is held
by any person or federal agency which may not be foreclosed by strict
foreclosure pursuant to federal law, a decree may be entered providing for
such period of redemption as the court may determine, and providing for a
sale of the mortgaged premises at the conclusion of such period if the premises
are not redeemed, and for the time, manner, and notice of sale, if required, and
the application of any proceeds.
(g) In an action for foreclosure under this section, where the time of
redemption has expired, the party obtaining the foreclosure shall cause a
certified copy of the judgment and the certificate of nonredemption to be
recorded in the office where by law a deed of the lands is required to be
recorded.
(h) If the plaintiff complies with subsection (g) of this section, the
expiration of the right of redemption under the decree shall foreclose the
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VT LEG 266061.1
interest of subsequent purchasers, mortgagees, or attaching creditors whose
interest in the property being foreclosed first arose after the filing of the
complaint for foreclosure in the land records as provided in section 4932 of
this chapter.
Subchapter 3. Foreclosure by Judicial Sale
§ 4945. JUDICIAL SALE FORECLOSURE
(a) All liens and mortgages affecting real property may, on the written
motion of any party to any suit for foreclosure of such liens or mortgages, or at
the discretion of the court before which the foreclosure proceedings are
pending, be foreclosed by a judicial foreclosure sale, even if the mortgage does
not contain a sale provision instead of a strict foreclosure.
(b) In an action for foreclosure, if a lien or interest in such realty is held by
any person or federal agency which may not be foreclosed by strict foreclosure
pursuant to federal law, a decree may be entered providing for such period of
redemption as the court may determine, and providing for a sale of the
mortgaged premises at the conclusion of such period if said premises are not
redeemed, and for the time, manner, and notice of sale, if required, and the
application of the proceeds therefrom.
§ 4946. PROCEDURE
(a) Order for judicial sale. Upon entry of a decree of judicial sale
foreclosure, the court shall order that the mortgaged property be sold at a
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VT LEG 266061.1
public sale if it is not redeemed within the time period allowed by the court.
The public sale shall be conducted on or before six months from the expiration
of the last redemption date set forth in the decree unless extended by the court
or stayed by a bankruptcy filing. The time and manner of the sale shall be
specified in the notice of sale required by section 4952 of this title.
(b) Time for redemption; owner-occupied dwelling house or farmland. If a
decree is made foreclosing the right of redemption by judicial sale with respect
to farmland or a dwelling house that is occupied by the owner as his or her
principal residence at the time the plaintiff applies for entry of judgment, the
time of redemption shall be established by the court and shall be six months
from the date of the decree, unless a shorter time is ordered by the court. The
court shall fix the period of redemption taking into consideration whether
there is value in the mortgaged property in excess of the mortgage debt and
debt owed to junior lienholders, any assessed but unpaid property taxes, the
condition of the mortgaged property, and any other equities. No sale of a
dwelling house when occupied by the owner as his or her principal residence
at the time the plaintiff applies for entry of judgment may take place within
seven months of service of the foreclosure complaint, unless the court orders a
shortened redemption period pursuant to this section or the plaintiff and the
mortgagor mutually agree to a shorter period after commencement of the
action to foreclose the mortgage.
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(c) Time for redemption; other property. If a decree is made foreclosing the
right of redemption by judicial sale with respect to any property other than
farmland or a dwelling house that is occupied by the owner as his or her
principal residence at the time the plaintiff applies for entry of judgment, the
redemption period shall be eliminated or reduced by the court to no more than
30 days.
(d) Writ of possession. Upon expiration of the period of redemption in the
decree, other than farmland or a dwelling house when currently occupied by
the owner as his or her principal residence, if the mortgagor or the
mortgagor’s successors, heirs, or assigns have not redeemed the mortgage,
any remaining rights of the mortgagor to possession shall terminate, and the
clerk of the court shall issue a writ of possession at the plaintiff’s request and
upon court approval. In the case of farmland or a dwelling house currently
occupied by the owner as his or her principal residence when the period of
redemption in the decree expires, the clerk shall issue a writ of possession at
the plaintiff’s request and upon approval of the court. Such writ shall have the
same force and effect and be executed in the same manner as similar writs
issued after judgment by a court of law in ejectment proceedings. Where the
mortgaged property is occupied by a residential tenant, the writ shall be
served on the tenant, and the plaintiff shall be placed in possession of the
mortgaged property without further proceedings no sooner than 30 days after
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the writ is served, or upon such other time as is required by federal law,
whichever is longer.
§ 4947. FORECLOSURE OF EQUITY OF REDEMPTION; RECORDING
(a) In an action for foreclosure under this subchapter where the time of
redemption has expired, the party obtaining the foreclosure shall cause a
certified copy of the judgment and the certificate of nonredemption to be
recorded in the office where by law a deed of the lands is required to be
recorded.
(b) If the plaintiff complies with subsection (a) of this section, the
expiration of the right of redemption under the decree shall foreclose the
interest of subsequent purchasers, mortgagees, or attaching creditors whose
interest in the property being foreclosed first arose after the filing of the
complaint for foreclosure in the land records as provided in section 4932 of
this chapter.
§ 4948. REINSTATEMENT OF MORTGAGE PRIOR TO SALE
(a) Upon agreement of the mortgagor and mortgagee, the mortgagor may
reinstate or modify the loan after the expiration of the redemption period set
forth in the judgment order but before the public sale. Upon reinstatement or
modification of the loan, the mortgagee shall execute a waiver of foreclosure
and, after receiving court approval, record it in the land records of the city or
town where the mortgaged property lies. Upon recording, the waiver of
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foreclosure shall operate to terminate the foreclosure and restore the parties
and all junior lienholders to the positions they held prior to the filing of the
foreclosure, as amended by any modification agreement between the
mortgagor and mortgagee.
(b) The following form of waiver of foreclosure may be used. Nothing
herein shall be construed to prevent the use of other forms or to prevent
alteration of the form as circumstances require:
WAIVER OF FORECLOSURE
MORTGAGEE, holder of record of a mortgage deed dated ________, 20____
and of record in Book ___ at Page ____ of the City/Town of __________
Land Records (“the Mortgage”) executed and delivered to it by
MORTGAGOR(S) covering real estate located in the Town of _________ ,
Vermont hereby acknowledges and agrees:
1. For the breach of the condition of the Mortgage, MORTGAGEE
initiated a foreclosure action against MORTGAGOR by Complaint for
Foreclosure dated _____________, 20____ which is of record in Book
_____at Page _____ of the Town of _____ Land Records.
2. That MORTGAGOR(S) has/have now cured the default and requested
reinstatement of the Mortgage and the MORTGAGEE agrees to
reinstate the mortgage, as amended by any modification agreement
between the mortgagor and mortgagee.
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NOW THEREFORE, MORTGAGEE does hereby acknowledge that it has
received payment of the arrearages due it under the Mortgage and the
promissory note which it secures, and in consideration thereof, does hereby
waive the above-entitled foreclosure action and release unto said
MORTGAGOR, his/her/its heirs, personal representatives, successors, and
assigns, all claims asserted in the foreclosure action. THE MORTGAGE IS
NOT DISCHARGED.
This waiver is given pursuant to 12 V.S.A. § 4948. This waiver shall have no
effect on the Mortgage referenced above other than to reinstate the same, as
amended by any agreement between the mortgagor and mortgagee, and the
rights of all parties named in the foreclosure action, as well as the rights of
any junior lienholders, remain intact, except as amended by any agreement
between the mortgagor and mortgagee, as if no foreclosure had been
commenced.
IN WITNESS WHEREOF, the said MORTGAGEE has caused this instrument
to be executed by its duly authorized agent this ____ day of ________ , 20___.
MORTGAGEE
By: _____________________________________
Its Duly Authorized Agent
Printed Name: _______________________
State of _____________
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County of ____________________
At _________________ in said County and State, then personally appeared
the above-named duly authorized agent who acknowledged the foregoing
waiver of foreclosure to be his/her free act and deed and the free act and deed
of the MORTGAGEE.
Before me, _______________________
Printed Name:__________________________
Notary Public
My Commission expiration ____________________
*****************************************************
The request for waiver of foreclosure is SO ORDERED this ____ day
of _________________________, 20 ____.
______________________________
Superior Court Judge
§ 4949. MORTGAGOR’S REDEMPTION PRIOR TO JUDICIAL SALE
(a) The mortgagor is entitled to redeem the premises at any time prior to
the public sale by paying the full amount due under the judgment order and
such other amounts, including costs and expenses of sale, accruing
postjudgment as agreed upon by the mortgagor and mortgagee or ordered by
the court.
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(b) Upon agreement of the parties, the mortgagor may redeem the premises
at any time prior to the public sale by paying less than the full amount due
under the judgment order. In such case, the parties to the foreclosure shall,
with court approval, amend the redemption amount. Upon payment of the
amended redemption amount, the court shall issue a Supervening Certificate of
Redemption as evidence that the judgment amount was redeemed. Upon the
recording of a certified copy of the Supervening Certificate of Redemption in
the land records, the foreclosed mortgage shall be of no further force or effect
and any junior lienholder shall return to the position it held prior to the filing
of the foreclosure.
(c) The redemption right established by this section shall be in addition to
the redemption right set forth in the decree.
§ 4950. [Reserved.]
§ 4951. JUDGMENT VACATED
Notwithstanding any provision to the contrary in this chapter or other law,
the mortgagor and mortgagee may stipulate and move to vacate the judgment
at any time prior to the public sale. If the court approves the motion, the
judgment shall be vacated and all parties, the property, and any lienholders of
record in the land records will be restored to their original positions as if no
foreclosure had been commenced and no judgment entered. Notwithstanding
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any other provision of law, this section will apply retroactively and apply to
orders to vacate in existence on the effective date of this section.
§ 4952. SALE PROCEDURES
(a) Generally. If the mortgaged property is not redeemed, the plaintiff
shall sell the mortgaged property in accordance with this section, complying
with all court orders and applicable power of sale provisions.
(b) Notice of sale; publication. Notice of sale shall be published once in
each of three successive weeks in a newspaper of general circulation in the
town where the land lies, the first publication to be no fewer than 21 days
before the day of sale.
(c) Notice of sale; service. A copy of the notice of sale shall be mailed by
first class mail, postage prepaid, to all parties who appeared in the foreclosure
action or to their attorneys of record. If the mortgagor has not appeared in the
foreclosure action, a copy of the notice of sale shall also be mailed by first
class mail, postage prepaid, to the mortgagor at the mortgagor’s last known
address. The notice of sale shall include the specific date, time, and location
of the sale and shall be mailed after the last date of redemption in the decree
but no fewer than 30 days before the date of the sale.
(d) Notice of sale; waiver. Any party entitled to be sent notice under this
section may, either before or after the foreclosure sale, waive the party’s right
to receive notice, in which case no foreclosure sale shall be invalid or
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VT LEG 266061.1
ineffectual to foreclose that party’s rights under the mortgage. This subsection
shall not apply to farmland or to a dwelling house unless approved by the
court at or before the confirmation of sale.
(e) Notice of sale; form. The following form of notice of sale may be used
and may be altered as circumstances require, but nothing herein shall be
construed to prevent the use of other forms:
By virtue and in execution of the Power of Sale contained in a certain
mortgage given by ______________ to _______________dated
______________________ and recorded in Volume ______, Page _________
of the land records of the municipality of ______________, of which
mortgage the undersigned is the present holder (if by assignment, or in any
fiduciary capacity, give reference) for breach of the conditions of said
mortgage and for the purpose of foreclosing the same will be sold at Public
Auction at _______________ (place) at ______ o’clock , ___M. on the
_______day of _________, 20____all and singular the premises described in
said mortgage,
(In case of partial releases, state exceptions.)
To wit: (Legal description of the premises.)
Terms of sale: (State here the amount, if any, to be paid in cash by the
purchaser at the time of the sale, and the schedule for payment of the balance
and other terms of sale.)
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The mortgagor is entitled to redeem the premises at any time prior to the sale
by paying the full amount due under the mortgage, including the costs and
expenses of the sale.
Other terms to be announced at the sale or inquire at __________
Signed: ____________________________
Mortgagee (may be signed by mortgagee’s attorney)
Dated: ________________________________, 20____.
§ 4953. CONDUCT AND LOCATION OF SALE
(a) Location. The sale shall be held at the mortgaged property unless
another place for sale is directed by the court. At the sale, the mortgaged
property shall be sold to the highest bidder in conformance with the terms of
sale set forth in the notice of sale.
(b) Adjournments. The public sale may be adjourned one or more times for
a total time not exceeding 30 days, without further court order, and without
publication or service of a new notice of sale, by announcement of the new sale
date to those present at each adjournment or by posting notice of the
adjournment in a conspicuous place at the location of the sale. Notice of the
new sale date shall also be sent by first class mail, postage prepaid, to the
mortgagor at the mortgagor’s last know address at least five days before the
new sale date. The public sale may be adjourned for a period of time in excess
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VT LEG 266061.1
of 30 days by agreement of the mortgagor and mortgagee or by order of the
court.
(c) Permitted bidders. Any person may bid at the sale. All bidders, except
for the mortgagee plaintiff or designee, shall meet the requirements set forth in
the notice of sale in order to bid at the sale.
§ 4954. PROCEDURE FOLLOWING SALE
(a) Confirmation order. Following the sale, the plaintiff shall file with the
court a report on oath of the sale, together with a request for confirmation of
the sale, which shall include an accounting of the sale proceeds, and a
proposed order confirming the sale. Copies of the report of the sale and
request for confirmation shall be mailed by first class mail, postage prepaid, to
all parties who appeared in the foreclosure action or to their attorneys of
record and to the mortgagor at the mortgagor’s last known address. The court
may issue an order of confirmation of the sale without hearing, unless the
court in its discretion determines that a hearing is necessary. The order of the
court confirming the sale shall be conclusive evidence as against all persons
that the foreclosure and sale were conducted in accordance with this section.
(b) Transfer of title. The confirmation order shall be recorded in the land
records of the town where the mortgaged property is located and shall transfer
title to the mortgaged property to the purchaser upon recording.
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VT LEG 266061.1
(c) Disbursement of proceeds. In the event that the proceeds of the sale,
after first deducting the reasonable expenses incurred in making the sale,
exceed the amounts due to the plaintiff at the time of sale, the confirmation
order shall provide for the payment of the surplus to other lienholders of
record in the order of the priority of their liens. In the event that the proceeds
of the sale exceed the amount due to the plaintiff and the amount due to the
other defendants, the excess shall be paid to the defendant mortgagor.
(d) Deficiency. The plaintiff may request a deficiency judgment in the
foreclosure complaint. The court may assess a judgment against the
mortgagor for the deficiency if the proceeds of sale are insufficient to meet the
expenses incurred in making the sale and the amount due to the plaintiff. If the
plaintiff seeks a deficiency judgment, it shall be requested prior to issuance of
the confirmation order. Failure to request a deficiency judgment shall be
deemed a waiver of any deficiency judgment against a mortgagor.
(e) Failure of sale; resale. In the event that the purchaser fails to pay the
balance of the purchase price according to the terms of the sale, then, upon the
request of the plaintiff, the down payment shall be forfeited and the court shall
issue an order vacating the confirmation order. Upon motion and after
hearing, the court may issue a confirmation order to the second highest bidder.
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VT LEG 266061.1
Subchapter 4. Foreclosure by Nonjudicial Sale
§ 4961. POWER OF NONJUDICIAL SALE
Whether or not a power of sale is contained in a mortgage relating to any
property, except for farmland or a dwelling house owned by a natural person,
instead of a suit and decree of foreclosure, the mortgagee may, upon breach of
mortgage condition, foreclose upon the property without first commencing a
foreclosure action or obtaining a foreclosure decree by complying with the
terms of this subchapter. No sale under and by virtue of a nonjudicial power
of sale shall be valid and effectual to foreclose the mortgage unless the
conditions of this subchapter are complied with.
§ 4962. NOTICE OF INTENTION TO FORECLOSE
(a) At least 30 days prior to service of a notice of sale pursuant to
subsection 4952(c) of this title, notice of intention to foreclose in a writing
complying with this section shall be sent to the mortgagor by registered or
certified mail at his or her last known address.
(b) The writing required by this section shall state, in a manner calculated
to make the mortgagor aware of the situation:
(1) the mortgage to be foreclosed;
(2) the mortgage condition claimed to have been breached;
(3) that the mortgagee has accelerated maturity of the debt secured by
the mortgage, if that is the case;
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VT LEG 266061.1
(4) the amount to be paid or other action necessary to cure, and the time
within which the cure must take place, which shall be not less than 30 days
after the date of the notice of intention to foreclose;
(5) the intention of the mortgagee to foreclose by exercising the power
of sale contained in the mortgage, if the breach of the mortgage condition is
not cured within the time and in the manner specified in the notice; and
(6) that the mortgagor will be entitled to be sent notice of the
foreclosure sale at least 60 days prior to the sale and to redeem the mortgaged
property at any time prior to the sale by paying the full amount due under the
mortgage, including the costs and expenses of the sale.
(c)(1) The following notice of intent to foreclose form may be used and may
be altered as circumstances require:
PLEASE TAKE NOTICE that you have defaulted under Loan No.
__________ by [mortgage condition breached] required by your Promissory
Note dated __________, 20___. This default also constitutes a breach of the
Mortgage, dated __________, 20___, recorded in Volume ___ at Page ___ of
the Land Records, which secures the Loan. As a result of your default, we
have accelerated the maturity of all indebtedness due on the Loan and secured
by the Mortgage, totaling $__________ as of today’s date. In order to cure
this default, you must pay to us on or before __________ [a date not less than
thirty (30) days after the date of this Notice] the sum of $__________, plus
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VT LEG 266061.1
interest at the rate of $__________ per day to the date of payment. If you do
not cure this default by making the payments required, it is our intention to
foreclose by exercising the power of sale contained in the above Mortgage.
You will be sent notice of the foreclosure sale at least sixty (60) days prior to
the sale, and you will be entitled to redeem your interest in the mortgaged
property at any time prior to the sale by paying the full amount due under the
Mortgage, including the costs and expenses of the sale. If you do not cure the
default or redeem your interest, your ownership of the mortgaged property will
be terminated.
(2) This subsection shall not be construed to prevent the use of other
forms except that all notices shall comply with the provisions of subsection (b)
of this section.
§ 4963. PUBLICATION OF NOTICE OF SALE
Notice of a sale conducted pursuant to this subchapter shall be published
once in each of three successive weeks, in a newspaper of general circulation
in the town where the land lies, the first publication to be not less than 21 days
before the day of sale.
§ 4964. RECORDING
The mortgagee shall record the notice of sale in the land records of the
town or city where the land lies not less than 60 days prior to the sale. The
filing of the notice of the sale shall be in lieu of filing a foreclosure complaint
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VT LEG 266061.1
under section 4932 of this title and shall be sufficient notice of the pendency of
the nonjudicial foreclosure by power of sale to all persons who acquire any
interest or lien in the mortgaged property between the dates of recording the
notice of sale and recording the foreclosure deed. Without further notice or
service, those persons shall be bound by the power of sale and the foreclosure
deed and shall be foreclosed from all rights or equity in the mortgaged
property.
§ 4965. SERVICE; FORM
(a)(1) In all cases, unless service is waived under subsection 4966(g) of
this title, a copy of the notice of sale shall be served on the mortgagor or his or
her representative in interest by:
(A) sending the notice by registered or certified mail addressed to the
mortgagor or such representative at his or her last known address, or to such
person and address as may be agreed upon in said mortgage, at least 60 days
before said sale; or
(B) serving the notice in any manner authorized by the Vermont
Rules of Civil Procedure.
(2) As used in this section, “mortgagor” shall mean the mortgagor or
the then record owner of the mortgaged property.
(b)(1) A copy of the notice of sale shall be sent to any tenant lawfully
occupying the mortgaged property and to any person having a recorded
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interest in the mortgaged property of record which will be foreclosed by the
sale, provided that the interest is recorded in the applicable land records prior
to the recording of the notice of sale. The notice required by this subsection
shall be sent not less than 60 days before the sale. Notice to a tenant shall be
sufficient if mailed to the tenant by first class mail at the address specified in
the lease, if recorded, or to the occupant at the address of the mortgaged
property, if the lease is not recorded.
(2) Compliance with this subsection shall be sufficient with respect to
persons entitled to receive notice under subdivision (1) of this subsection, and
the failure to give additional notice shall not be grounds to invalidate the sale.
Any mortgagor or junior lienholder who refuses to accept or claim mailed or
served notice or who frustrates attempts by the mortgagee to give notice of the
sale by failing to give or leave a forwarding address or by other acts or
omissions shall be deemed to be notified of the sale, provided that such
mortgagee shall have made a good faith effort to provide such notice.
(c)(1) The following notice of sale form may be used and may be altered as
circumstances require:
By virtue and in execution of the Power of Sale contained in a certain
mortgage given by __________ to __________ dated __________ and
recorded in Volume __________ Page __________ of the land records of the
town of __________, of which mortgage the undersigned is the present holder,
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(if by assignment, or in any fiduciary capacity, give reference) for breach of
the conditions of said mortgage and for the purpose of foreclosing the same
will be sold at Public Auction at __________ o’clock, ___ M. on the
__________ day of __________ 20____, (place) __________ at the
mortgaged property.
To wit: (Legal description of the mortgaged property and in case of partial
releases, state exceptions.)
Terms of sale: (State here the amount, if any, to be paid in cash by the
purchaser at the time of the sale, and the schedule for payment of the balance.)
The mortgagor and all junior lienholders are entitled to redeem the mortgaged
property at any time prior to the sale by paying the full amount due under the
mortgage, including the costs and expenses of the sale.
Other terms to be announced at the sale or inquire at __________
(Signed) _________________________________
Mortgagee (may be signed by mortgagee’s attorney)
__________ 20__
(2) This subsection shall not be construed to prevent the use of other
forms. A notice of sale shall be sufficient if it fully sets forth the date, time, and
place of sale; the town, county, street or highway and street number, if any, of
the mortgaged premises; the date of the mortgage; the volume and page of the
recording of the mortgage; the terms of the sale; the statement language
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required by subdivision (d)(1) of this section; and notice of the right to redeem.
(d)(1) The notice of the sale shall include the following statement: “The
mortgagor and all junior lienholders are hereby notified that at any time
before the foreclosure sale, the mortgagor and all junior lienholders have a
right to petition the civil division of the superior court for the county in which
the mortgaged property is situated, with service upon the mortgagee, and upon
such bond as the court may require, to enjoin the scheduled foreclosure sale.
Failure to institute such petition and complete service upon the foreclosing
party, or the party’s agent, conducting the sale prior to sale shall thereafter
bar any action or right of action of the mortgagor or any junior lienholder
based on the validity of the foreclosure, the right of the mortgagee to conduct
the foreclosure sale, or compliance by the mortgagee with the notice
requirements and other conditions of this section. An action to recover
damages resulting from the sale of the mortgaged property on the date of the
sale may be commenced at any time within one year following the date of the
sale, but not thereafter.”
(2) The mortgagor and all junior lienholders shall have the rights
contained in the notice provided for in this subsection.
§ 4966. CONDUCT AND LOCATION OF SALE
(a) The sale shall be held at the mortgaged property except that it may be
held elsewhere if agreed to in writing by the mortgagor and the mortgagee not
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less than 60 days nor more than 90 days before the sale. At the sale, the
mortgaged property shall be sold to the highest bidder in conformance with the
terms of sale set forth in the foreclosure notice.
(b) The mortgagor shall be entitled to redeem the mortgaged property at
any time prior to the sale by paying to the mortgagee the full amount due
under the mortgage, including the costs and expenses of the sale.
(c) The public sale may be adjourned one or more times for a total time not
exceeding 60 days by announcement of the new sale date to those present at
each adjournment or by posting notice of the adjournment in a conspicuous
place at the location of the sale. Written notice of the new sale date shall also
be given by first class mail, postage prepaid, to any person who received
notice of the sale pursuant to section 4965 of this title.
(d) Any person may bid at the sale. All bidders, except for the mortgagee
plaintiff or designee, shall meet the requirements set forth in the notice of sale
in order to bid at the sale.
(e) In the event that the proceeds of sale, after first deducting the
reasonable expenses incurred in making the sale, exceed the amounts due to
the mortgagee at the time of sale, the surplus shall be paid to other lien
holders of record in the order of the priority of their liens. In the event that the
proceeds of sale exceed the amount due to the mortgagee and the amounts due
to the other lien holders, the excess shall be paid to the mortgagor. The
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mortgagee or person conducting the sale may interplead any sale proceeds in
excess of the indebtedness and expenses secured by the mortgage in the event
there are any liens of record against the real estate.
(f) This section shall not preclude the mortgagee from maintaining a
subsequent action against the mortgagor for any deficiency.
(g) Any party entitled to be sent notice under this section may, either before
or after the foreclosure sale, waive the party’s right to receive notice, in which
case no foreclosure sale shall be invalid or ineffectual to foreclose that party’s
rights under the mortgage. A waiver of notice authorized or validated under
this section shall be recorded in the land records in the town or city where the
property is located.
§ 4967. RECORDING FOLLOWING SALE
(a) Within 90 days after the sale, the mortgagee selling pursuant to the
power shall cause the foreclosure deed and an accompanying affidavit to be
recorded in the land records of the town where the property is situated. The
affidavit setting forth fully and particularly the mortgagee’s acts with respect
to the sale of the mortgaged property, including the dates that notices of the
sale were published, shall set forth facts showing that no person in interest is
in the military service as defined in the Service Members Civil Relief Act of
2003. The affidavit or a duly certified copy thereof shall be admissible in
evidence on the issue of whether the power of sale was duly executed.
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(b) If the recording required by this section is prevented by an order or
stay of any court, the time for such recording shall be extended until 10 days
after the expiration or removal of such order or stay.
(c) If the recording required by this section is made more than 60 days
after the sale, the affidavit shall state why the recording was not made earlier.
(d) Failure to record the deed and affidavit within the statutory period
required by this subsection shall render the sale void and of no effect only as
to liens or other encumbrances of record intervening between the day of the
sale and the time of recording of said deed and affidavit.
(e) Correction of error. In case of an alleged error or omission in the
affidavit, the court, on petition and after notice to interested parties, may
validate the affidavit or authorize the recording of an affidavit amending,
correcting or in substitution for an affidavit so recorded, and the affidavit so
authorized to be recorded or a certified copy of the record thereof shall have
the same effect and shall be admitted in evidence as if it had been recorded
within the 90-day period required by this section.
§ 4968. TRANSFER OF TITLE
Title to the foreclosed mortgaged property under this section shall not pass
to the purchaser until the time of the recording of the deed and affidavit. Upon
such recording, title to the mortgaged property shall pass to the purchaser free
and clear of all interests and encumbrances which do not have priority over
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such mortgage.
§ 4969. FAILURE OF SALE; RESALE
If the purchaser does not pay the balance of the purchase price according
to the terms of the sale, and at the option of the mortgagee, the down payment,
if any, shall be forfeited and the foreclosure sale shall be void.
§ 4970. FORM AND EFFECT OF FORECLOSURE DEED
(a) The foreclosure deed shall be in substantially the following form:
__________ of __________ County, __________ State of __________, holder
of a mortgage from __________ to __________ dated __________, recorded
in __________ Book___ at Page___ of the Town of ____ Land Records, by the
power conferred by said mortgage and every other power, for___ dollars paid,
grant to __________, (complete mailing address) __________, of
__________Street, Town (City) of __________, __________ County, State of
__________, the premises conveyed by said mortgage.
(Here add acknowledgment)
(b) A deed substantially in the form set forth in subsection (a) of this
section shall, when duly executed and delivered, have the force and effect of a
deed in fee simple to the grantee, heirs, successors and assigns, to their own
use, with covenants on the part of the mortgagee, for himself or herself, that, at
the time of the delivery of such deed, the mortgagee was duly authorized to
make sale of the mortgaged property; that in all of the mortgagee’s
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VT LEG 266061.1
proceedings in the sale thereof, the mortgagee has complied with the
requirements of this subchapter; and that the mortgagee will warrant and
defend the same to the grantee, heirs, successors, and assigns against the
lawful claims of all persons claiming by, from, or under him or her.
Sec. 2. REPEAL
12 V.S.A. chapter 163, subchapter 6 (foreclosure of mortgages) is repealed.
Sec. 3. EFFECTIVE DATE; APPLICABILITY
This act shall take effect on July 1, 2012 and shall apply to any mortgage
foreclosure proceeding instituted after that date.
1
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VT LEG 266061.1
H.4031
Introduced by Representatives Kupersmith of South Burlington and Koch of2
Barre Town3
Referred to Committee on4
Date:5
Subject: Court procedure; foreclosure of mortgages6
Statement of purpose: This bill proposes to update and consolidate statutory7
provisions regarding foreclosure of mortgages.8
An act relating to foreclosure of mortgages9
It is hereby enacted by the General Assembly of the State of Vermont:10
Sec. 1. 12 V.S.A. chapter 172 is added to read:11
CHAPTER 172. FORECLOSURE OF MORTGAGES12
Subchapter 1. General Provisions13
§ 4931. DEFINITIONS14
As used in this chapter:15
(1) “Agricultural activity” includes the growing, raising, and production16
of horticultural and silvicultural crops, grapes, berries, trees, fruit, poultry,17
livestock, grain, hay, and dairy products.18
(2) “Dwelling house” means a residential structure or mobile home19
which contains one to four family housing units, or individual units of20
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VT LEG 266061.1
condominiums or cooperatives, each of which is used or intended to be used as1
a residence.2
(3) “Farmland” means land devoted primarily to commercial3
agricultural activities.4
(4) “Value” means market value less all reasonable expenses that would5
be incurred in selling the property. Market value for purposes of this section6
may be determined based on evidence of market value deemed by the court to7
be reasonably reliable, which may include grand list valuation and the common8
level of appraisal used in the town where the property is located, if the court9
finds such evidence to be reasonably reliable.10
§ 4932. VENUE; JOINDER OF PARTIES; RECORDING11
(a) Actions to foreclose a mortgage under subchapter 2 or 3 of this chapter12
shall be brought in the superior court of the county where the land lies, or, if13
the land described in the mortgage lies in more than one county, then in one of14
the counties in which the land lies.15
(b) The plaintiff shall file a copy of the complaint in the town clerk’s office16
in each town where the mortgaged property is located. The clerk of the town17
shall minute on the margin of the record of the mortgage that a copy of18
foreclosure proceedings on the mortgage is filed. The filing shall be sufficient19
notice of the pendency of the action to all persons who acquire any interest or20
lien on the mortgaged premises between the dates of filing the copy of21
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VT LEG 266061.1
foreclosure and the recording of the final judgment in the proceedings.1
Without further notice or service, those persons shall be bound by the2
judgment entered in the cause and be foreclosed from all rights or equity in the3
premises as completely as though they had been parties in the original action.4
(c) If the mortgaged property is subject to a residential rental agreement, as5
defined in 9 V.S.A. § 4451:6
(1) The plaintiff shall join as a party defendant any person occupying7
the mortgaged property pursuant to a residential rental agreement as of the date8
the copy of the complaint is recorded in the land records. Service of the9
complaint on the tenant shall be sufficient if mailed to the tenant by first class10
mail at the address specified in the rental agreement, if the agreement is11
recorded, or to the “occupant” at the address of the leased premises if the12
agreement is not recorded.13
(2) The summons and complaint served on any person occupying the14
premises pursuant to a residential rental agreement shall contain the following15
notice, written in at least 14-point type:16
THE PROPERTY IN WHICH YOU LIVE IS BEING17
FORECLOSED UPON. YOU ARE NAMED AS A DEFENDANT18
IN THE FORECLOSURE BECAUSE YOUR RIGHT TO REMAIN19
ON THE PREMISES MAY END WHEN THE FORECLOSURE IS20
COMPLETED. YOU MUST NOTIFY THE COURT OF YOUR21
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VT LEG 266061.1
NAME AND ADDRESS IN ORDER TO BE KEPT INFORMED OF1
THE STATUS OF THE FORECLOSURE.2
(3) Upon receipt of the complaint, the owner of the mortgaged property3
shall notify each tenant who enters into a residential rental agreement that the4
premises are the subject of a pending foreclosure action and that, in the event5
the owner is unable to redeem the premises, the tenant may be required to6
vacate the premises upon 30 days’ notice. The failure of the owner to provide7
notice under this subsection shall not affect or invalidate the foreclosure action.8
(d) All proceedings shall be before the presiding judge alone, and trial shall9
be without jury.10
§ 4933. NOTICE TO COMMISSIONER OF BANKING, INSURANCE,11
SECURITIES, AND HEALTH CARE ADMINISTRATION12
(a) When the mortgage holder files an action under subchapter 2 or 3 of13
this chapter to foreclose owner-occupied one- to four-family residential14
property, the mortgage holder shall simultaneously file a notice of foreclosure15
with the commissioner of the department of banking, insurance, securities, and16
health care administration. The commissioner may require that the notice of17
foreclosure be sent in an electronic format. The notice of foreclosure shall18
include:19
(1) the name and current mailing address of the mortgagor;20
(2) the address of the property being foreclosed;21
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VT LEG 266061.1
(3) the name of the current mortgage holder, along with the address and1
telephone number of the person or entity responsible for workout negotiations2
concerning the mortgage;3
(4) the name of the original lender, if different;4
(5) the name, address, and telephone number of the mortgage servicer, if5
applicable; and6
(6) any other information the commissioner may require.7
(b) The court clerk shall not accept a foreclosure complaint for filing8
without a certification by the plaintiff that the notice of foreclosure has been9
sent to the commissioner of banking, insurance, securities, and health care10
administration in accordance with subsection (a) of this section.11
(c) Acceptance of a foreclosure complaint by the court clerk that, due to a12
good faith error or omission by the plaintiff or the clerk, does not contain the13
certification required in subsection (a) of this section shall not invalidate the14
foreclosure proceeding, provided that the plaintiff files the required notice with15
the commissioner within 10 days of obtaining knowledge of the error or16
omission.17
§ 4934. SUPPLEMENTAL JUDGMENT JOINING PARTIES; RECORDING18
At any time, without further notice or service on the purchaser or mortgage19
or lienholder whose interest in the property being foreclosed first arose after20
the filing of the complaint in the town clerk’s office, and upon filing certified21
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VT LEG 266061.1
copies of the deed, mortgage, or attachment with the clerk of the court by the1
plaintiff in the foreclosure action, any superior judge may sign a supplemental2
judgment specifically naming that party. Reference to the deed, mortgage, or3
lien and the supplemental judgment may be filed in the town clerk’s office for4
record, and it shall have the same force and effect as though that person had5
been made a party defendant in the original action.6
§ 4935. TAXES PAID BY MORTGAGEE7
A tax assessed upon mortgaged real estate in this state may be paid by the8
mortgagee or assignee of the mortgage upon such property. The amount so9
paid including costs, if any, shall thereupon be added to and become a part of10
the debt or obligation secured by such mortgage.11
§ 4936. FORECLOSURE OF REAL OR PERSONAL PROPERTY12
A mortgage or a security agreement constituting a lien on both real and13
personal property to secure the payment of a debt, whether evidenced by one14
or more instruments, may be foreclosed in an action under subchapter 2 or 3 of15
this chapter.16
§ 4937. ATTORNEY’S FEES17
When a mortgage contains an agreement on the part of the mortgagor to pay18
the mortgagee, in the event of foreclosure, the attorney’s fees incident thereto,19
and claim is made therefor in the complaint, upon hearing, the court in which20
the complaint is brought shall allow such fee as in its judgment is just.21
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VT LEG 266061.1
§ 4938. EFFECT ON BANKRUPTCY PROCEEDINGS1
Nothing in this chapter shall be construed to supersede any provision of2
Title 11 of the United States Code.3
Subchapter 2. Strict Foreclosure4
§ 4941. DECREE FORECLOSING EQUITY OF REDEMPTION; WRIT OF5
POSSESSION6
(a) In any action for foreclosure with regard to any mortgage encumbering7
property except for a dwelling house of two units or fewer that is currently8
occupied by the owner as his or her principal residence at the time the plaintiff9
applies for entry of judgment, or farmland, the court may, if no sale is10
requested by the plaintiff or ordered by the court pursuant to subsection (b) of11
this section, issue a judgment and decree of foreclosure without requiring a12
judicial sale of the premises.13
(b) In an action brought under subsection (a) of this section, any party may14
by written motion request, or the court in its discretion may order, that property15
be sold at a judicial foreclosure sale, whether or not the mortgage contains a16
power of sale.17
(c) No decree foreclosing the right of redemption without sale shall be18
issued absent a finding by the court, based on competent evidence, that there is19
no substantial value in the property in excess of the mortgage debt found by20
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VT LEG 266061.1
the court to be due to the plaintiff and any other lienholder, plus assessed but1
unpaid property taxes due on the property.2
(d) If a decree is issued foreclosing the right of redemption without sale,3
the time of redemption shall be no more than six months from the date of the4
decree unless a shorter time is ordered, or the mortgagor and mortgagee5
plaintiff agree to a shorter period. The court shall fix the period of redemption6
taking into consideration whether there is value in the property in excess of the7
mortgage debt and debt owed to junior lienholders, any assessed but unpaid8
property taxes, the condition of the property, and any other equities.9
(e) If the premises are not redeemed agreeably to the decree, the clerk of10
the court shall issue a writ of possession at the plaintiff’s request. Such writ11
shall have the same force and effect and be executed in the same manner as12
similar writs issued after judgment by a court of law in ejectment proceedings.13
Where the premises are occupied by a residential tenant, the writ shall be14
served on the tenant, and no sooner than 30 days after the writ is served, the15
plaintiff shall be placed in possession of the property without further16
proceedings.17
(f)(1) In an action for foreclosure under this section, if a lien or interest in18
such realty is held by any person or federal agency which may not be19
foreclosed by strict foreclosure pursuant to federal law, the court shall proceed20
in accordance with subchapter 3 of this chapter.21
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VT LEG 266061.1
(2) In an action for foreclosure, if a lien or interest in such realty is held1
by any person or federal agency which may not be foreclosed by strict2
foreclosure pursuant to federal law, a decree may be entered providing for such3
period of redemption as the court may determine, and providing for a sale of4
the mortgaged premises at the conclusion of such period if the premises are not5
redeemed, and for the time, manner, and notice of sale, if required, and the6
application of any proceeds.7
(g) In an action for foreclosure under this section, where the time of8
redemption has expired, the party obtaining the foreclosure shall cause to be9
recorded in the office where by law a deed of the lands is required to be10
recorded, within 30 days after the expiration of the time of redemption, a11
certified copy of the judgment and the certificate of nonredemption.12
(h) The expiration of the right of redemption under the decree shall not13
foreclose the interest of subsequent purchasers, mortgagees, or attaching14
creditors whose interest in the property being foreclosed first arose after the15
filing of the complaint for foreclosure in the land records as provided in section16
4932 of this chapter, unless the plaintiff complies with subsection (g) of this17
section.18
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VT LEG 266061.1
Subchapter 3. Foreclosure by Judicial Sale1
§ 4945. JUDICIAL SALE FORECLOSURE2
(a) All liens and mortgages affecting real property may, on the written3
motion of any party to any suit for foreclosure of such liens or mortgages, or at4
the discretion of the court before which the foreclosure proceedings are5
pending, be foreclosed by a judicial foreclosure sale, even if the mortgage does6
not contain a sale provision instead of a strict foreclosure.7
(b) In an action for foreclosure, if a lien or interest in such realty is held by8
any person or federal agency which may not be foreclosed by strict foreclosure9
pursuant to federal law, a decree may be entered providing for such period of10
redemption as the court may determine, and providing for a sale of the11
mortgaged premises at the conclusion of such period if said premises are not12
redeemed, and for the time, manner, and notice of sale, if required, and the13
application of the proceeds therefrom.14
§ 4946. PROCEDURE15
(a) Order for judicial sale. Unless strict foreclosure is ordered pursuant to16
section 4941 of this title, the court shall, upon entry of a decree of foreclosure,17
order that the mortgaged property be sold at public sale if it is not redeemed18
within the time period allowed by the court. The time and manner of the sale19
shall be specified in the notice of sale required by section 4952 of this title.20
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VT LEG 266061.1
(b) Time for redemption; owner-occupied dwelling or farmland. If a1
decree is made foreclosing the right of redemption by judicial sale with respect2
to farmland or a dwelling house of four units or fewer that is currently3
occupied by the owner as his or her principal residence at the time the plaintiff4
applies for entry of judgment, the time of redemption shall be established by5
the court and shall be no more than six months from the date of the decree.6
The court shall fix the period of redemption taking into consideration whether7
there is value in the mortgaged property in excess of the mortgage debt and8
debt owed to junior lienholders, any assessed but unpaid property taxes, the9
condition of the mortgaged property, and any other equities. No sale of a10
dwelling house of four units or fewer when currently occupied by the owner as11
his or her principal residence at the time the plaintiff applies for entry of12
judgment may take place within seven months of service of the foreclosure13
complaint, unless the court orders a shortened redemption period pursuant to14
this section or the plaintiff and the mortgagor mutually agree to a shorter15
period after commencement of the action to foreclose the mortgage.16
(c) Time for redemption; other property. If a decree is made foreclosing the17
right of redemption by judicial sale with respect to any property other than18
farmland or a dwelling house of four units or fewer that is currently occupied19
by the owner as his or her principal residence at the time the plaintiff applies20
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VT LEG 266061.1
for entry of judgment, the redemption period shall be eliminated or reduced by1
the court to no more than 30 days.2
(d) Writ of possession. Upon expiration of the period of redemption, if the3
mortgagor or the mortgagor’s successors, heirs, or assigns have not redeemed4
the mortgage, any remaining rights of the mortgagor to possession shall5
terminate, and the clerk of the court shall issue a writ of possession at the6
plaintiff’s request. Such writ shall have the same force and effect and be7
executed in the same manner as similar writs issued after judgment by a court8
of law in ejectment proceedings. Where the mortgaged property is occupied9
by a residential tenant, the writ shall be served on the tenant, and no sooner10
than 30 days after the writ is served, the plaintiff shall be placed in possession11
of the mortgaged property without further proceedings.12
§ 4947. FORECLOSURE OF EQUITY OF REDEMPTION-RECORDING13
In an action for foreclosure under this subchapter where the time of14
redemption has expired, the party obtaining the foreclosure shall cause to be15
recorded in the office where by law a deed of the lands is required to be16
recorded, within 30 days after the expiration of the time of redemption, a17
certified copy of the judgment and the certificate of nonredemption.18
§ 4948. REINSTATEMENT OF MORTGAGE PRIOR TO SALE19
(a) Upon agreement of the parties, the mortgagor may reinstate the loan20
after the expiration of the redemption period set forth in the judgment order but21
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VT LEG 266061.1
before the public sale. To reinstate the loan, the mortgagee shall execute a1
waiver of foreclosure and, after receiving court approval, record it in the land2
records of the city or town where the mortgaged property lies. Upon3
recording, the waiver of foreclosure shall operate to terminate the foreclosure4
and restore the parties and all junior lienholders to the positions they held prior5
to the filing of the foreclosure.6
(b) The following form of waiver of foreclosure may be used. Nothing7
herein shall be construed to prevent the use of other forms or to prevent8
alteration of the form as circumstances require:9
WAIVER OF FORECLOSURE10
MORTGAGEE, holder of record of a mortgage deed dated ________, 20____11
and of record in Book ___ at Page ____ of the City/Town of __________12
Land Records (“the Mortgage”) executed and delivered to it by13
MORTGAGOR(S) covering real estate located in the Town of _________ ,14
Vermont hereby acknowledges and agrees:15
1. For the breach of the condition of the Mortgage, MORTGAGEE16
initiated a foreclosure action against MORTGAGOR by Complaint for17
Foreclosure dated _____________, 20____ which is of record in Book18
_____at Page _____ of the Town of _____ Land Records.19
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VT LEG 266061.1
2. That MORTGAGOR(S) has/have now cured the default and requested1
reinstatement of the Mortgage and the MORTGAGEE agrees to2
reinstate.3
NOW THEREFORE, MORTGAGEE does hereby acknowledge that it has4
received payment of the arrearages due it under the Mortgage and the5
promissory note which it secures, and in consideration thereof, does hereby6
waive the above-entitled foreclosure action and release unto said7
MORTGAGOR, his/her/its heirs, personal representatives, successors, and8
assigns, all claims asserted in the foreclosure action. THE MORTGAGE IS9
NOT DISCHARGED.10
This waiver is given pursuant to 12 V.S.A. § 4948. This waiver shall have no11
effect on the Mortgage referenced above other than to reinstate the same, and12
the rights of all parties named in the foreclosure action, as well as the rights of13
any junior lienholders, remain intact as if no foreclosure had been commenced.14
IN WITNESS WHEREOF, the said MORTGAGEE has caused this instrument15
to be executed by its duly authorized agent this ____ day of ________ , 20___.16
MORTGAGEE17
By: _____________________________________18
Its Duly Authorized Agent19
Printed Name: _______________________20
State of _____________21
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VT LEG 266061.1
County of ____________________1
At _________________ in said County and State, then personally appeared the2
above-named duly authorized agent who acknowledged the foregoing waiver3
of foreclosure to be his/her free act and deed and the free act and deed of the4
MORTGAGEE.5
Before me, _______________________6
Printed Name:__________________________7
Notary Public8
My Commission expiration ____________________9
*****************************************************10
The request for waiver of foreclosure is SO ORDERED this ____ day11
of _________________________, 20 ____.12
______________________________13
Superior Court Judge14
§ 4949. REDEMPTION PRIOR TO JUDICIAL SALE15
(a) The mortgagor is entitled to redeem the premises at any time prior to16
the sale by paying the full amount due under the judgment order.17
(b) Upon agreement of the parties, the mortgagor may redeem the premises18
at any time prior to the sale by paying less than the full amount due under the19
judgment order. In such case, the parties to the foreclosure shall, with court20
approval, amend the redemption amount. Upon payment of the amended21
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VT LEG 266061.1
redemption amount, the court shall issue a Supervening Certificate of1
Redemption as evidence that the judgment amount was redeemed. Upon the2
recording of a certified copy of the Certificate of Redemption in the land3
records, the foreclosed mortgage shall be of no further force or effect and any4
junior lienholder shall return to the position it held prior to the filing of the5
foreclosure.6
§ 4950. DEED IN LIEU OF FORECLOSURE7
In lieu of proceeding under section 4946 of this title, the mortgagor may8
convey the mortgaged property to the mortgagee. In such case, the rights of all9
parties named in the foreclosure action, as well as the rights of any junior10
lienholders, remain intact as if no foreclosure had been commenced.11
§ 4951. JUDGMENT VACATED12
Notwithstanding any provision to the contrary in this chapter or other law,13
parties who have entered an appearance in the foreclosure may stipulate and14
move to vacate the judgment at any time prior to the auction. If the court15
approves the motion, the judgment shall be vacated and the parties, the16
property, and any lienholders of record in the land records will be restored to17
their original positions as if no foreclosure had been commenced and no18
judgment entered. This section will apply retroactively and apply to orders to19
vacate in existence on the effective date of this section.20
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VT LEG 266061.1
§ 4952. SALE PROCEDURES1
(a) Generally. If the mortgaged property is not redeemed, the plaintiff shall2
sell the mortgaged property in accordance with this section, complying with all3
court orders and applicable power of sale provisions.4
(b) Notice of sale; publication. Notice of sale shall be published once in5
each of three successive weeks in a newspaper of general circulation in the6
town where the land lies, the first publication to be no fewer than 21 days7
before the day of sale.8
(c) Notice of sale; service. A copy of the notice of sale shall be mailed by9
first class mail, postage prepaid, to all parties who appeared in the foreclosure10
action or to their attorneys of record. If the mortgagor has not appeared in the11
foreclosure action, a copy of the notice of sale shall also be mailed by first12
class mail, postage prepaid, to the mortgagor at the mortgagor’s last known13
address. The notice of sale shall be mailed no fewer than 21 days before the14
date of sale.15
(d) Notice of sale; waiver. No foreclosure sale shall be invalid or16
ineffectual to foreclose a mortgage pursuant to this section if any party entitled17
to be sent notice, either before or after such foreclosure sale, waives its rights18
to such notice.19
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VT LEG 266061.1
(e) Notice of sale; form. The following form of notice of sale may be used1
and may be altered as circumstances require, but nothing herein shall be2
construed to prevent the use of other forms:3
By virtue and in execution of the Power of Sale contained in a certain4
mortgage given by ______________ to _______________dated5
______________________ and recorded in Volume ______, Page _________6
of the land records of the municipality of ______________, of which7
mortgage the undersigned is the present holder (if by assignment, or in any8
fiduciary capacity, give reference) for breach of the conditions of said9
mortgage and for the purpose of foreclosing the same will be sold at Public10
Auction at _______________ (place) at ______ o’clock , ___M. on the11
_______day of _________, 20____all and singular the premises described in12
said mortgage,13
(In case of partial releases, state exceptions.)14
To wit: (Legal description of the premises.)15
Terms of sale: (State here the amount, if any, to be paid in cash by the16
purchaser at the time of the sale, and the schedule for payment of the balance17
and other terms of sale.)18
The mortgagor is entitled to redeem the premises at any time prior to the sale19
by paying the full amount due under the mortgage, including the costs and20
expenses of the sale.21
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VT LEG 266061.1
Other terms to be announced at the sale or inquire at __________1
Signed: ____________________________2
Mortgagee (may be signed by mortgagee’s attorney)3
Dated: ________________________________, 20____.4
§ 4953. CONDUCT AND LOCATION OF SALE5
(a) Location. The sale shall be held at the mortgaged property unless6
another place for sale is directed by the court. At the sale, the mortgaged7
property shall be sold to the highest bidder in conformance with the terms of8
sale set forth in the notice of sale.9
(b) Adjournments. The public sale may be adjourned one or more times for10
a total time not exceeding 30 days, without further court order, and without11
publication or service of a new notice of sale, by announcement of the new sale12
date to those present at each adjournment or by posting notice of the13
adjournment in a conspicuous place at the location of the sale. The public sale14
may be adjourned for a period of time in excess of 30 days by agreement of the15
mortgagor and mortgagee or by order of the court.16
(c) Permitted bidders. Permitted bidders at the sale may include, without17
limitation, the mortgagee, the mortgagor, or any lien holder. All bidders,18
except for the mortgagee plaintiff, must meet the requirements set forth in the19
notice of sale in order to bid at the sale.20
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VT LEG 266061.1
§ 4954. PROCEDURE FOLLOWING SALE1
(a) Confirmation order. Following the sale, the plaintiff shall file with the2
court a report on oath of the sale, together with a request for confirmation of3
the sale, which shall include an accounting of the sale proceeds, and a4
proposed order confirming the sale. Copies of the report of the sale and5
request for confirmation shall be mailed by first class mail, postage prepaid, to6
all parties who appeared in the foreclosure action or to their attorneys of record7
and to the mortgagor at the mortgagor’s last known address. If no objections8
to the request for confirmation are filed within 15 days after it is filed, the9
court may issue an order of confirmation of the sale without hearing, unless the10
court in its discretion determines that a hearing is necessary. The order of the11
court confirming the sale shall be conclusive evidence as against all persons12
that the foreclosure and sale were conducted in accordance with this section.13
(b) Transfer of title. The confirmation order shall be recorded in the land14
records of the town where the mortgaged property is located and shall transfer15
title to the mortgaged property to the purchaser upon recording.16
(c) Disbursement of proceeds. In the event that the proceeds of the sale,17
after first deducting the reasonable expenses incurred in making the sale,18
exceed the amounts due to the plaintiff at the time of sale, the confirmation19
order shall provide for the payment of the surplus to other lienholders of record20
in the order of the priority of their liens. In the event that the proceeds of the21
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VT LEG 266061.1
sale exceed the amount due to the plaintiff and the amount due to the other1
defendants, the excess shall be paid to the defendant mortgagor. If the plaintiff2
is the high bidder at the sale, and the plaintiff’s bid exceeds the amount due to3
the plaintiff at the time of the sale, the plaintiff shall not be required to pay any4
surplus to the other lienholders or to the defendant mortgagor.5
(d) Deficiency. Unless the mortgaged property is farmland as defined in6
subdivision 4931(3) of this title or a dwelling house of two units or fewer that7
is currently occupied by the owner as his or her principal residence, the8
plaintiff may request a deficiency judgment in the foreclosure complaint. The9
court shall assess a judgment against the mortgagor for the deficiency if the10
proceeds of sale are insufficient to meet the expenses incurred in making the11
sale and the amount due to the plaintiff. Nothing in this section shall preclude12
the plaintiff from maintaining a subsequent action against the mortgagor for13
the deficiency if a deficiency judgment is not requested in the foreclosure14
complaint or if the request is withdrawn without prejudice prior to, or at the15
same time as, the request for confirmation of the sale.16
(e) Failure of sale; resale. In the event that the purchaser fails to pay the17
balance of the purchase price according to the terms of the sale, then, upon the18
request of the plaintiff, the down payment shall be forfeited, the foreclosure19
sale shall be void, the court shall issue an order vacating the confirmation20
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VT LEG 266061.1
order, and the plaintiff shall conduct a new sale in accordance with this1
subchapter.2
Subchapter 4. Foreclosure by Nonjudicial Sale3
§ 4961. POWER OF NONJUDICIAL SALE4
Whether or not a power of sale is contained in a mortgage relating to any5
property, except for farmland or a dwelling house of four units or less when6
currently occupied, at the time of service of the notice of sale pursuant to7
section 4964 of this title, by the owner as his or her principal residence, instead8
of a suit and decree of foreclosure, the mortgagee may, upon breach of9
mortgage condition, foreclose upon the property without first commencing a10
foreclosure action or obtaining a foreclosure decree by complying with the11
terms of this subchapter. No sale under and by virtue of a nonjudicial power of12
sale shall be valid and effectual to foreclose the mortgage unless the conditions13
of this subchapter are complied with.14
§ 4962. NOTICE OF INTENTION TO FORECLOSE15
(a) At least 30 days prior to service of a notice of sale pursuant to16
subsection 4952(c) of this title, notice of intention to foreclose in a writing17
complying with this section shall be sent to the mortgagor by registered or18
certified mail at his or her last known address.19
(b) The writing required by this section shall state, in a manner calculated20
to make the mortgagor aware of the situation:21
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VT LEG 266061.1
(1) the mortgage to be foreclosed;1
(2) the mortgage condition claimed to have been breached;2
(3) that the mortgagee has accelerated maturity of the debt secured by3
the mortgage, if that is the case;4
(4) the amount to be paid or other action necessary to cure, and the time5
within which the cure must take place, which shall be not less than 30 days6
after the date of the notice of intention to foreclose;7
(5) the intention of the mortgagee to foreclose by exercising the power8
of sale contained in the mortgage, if the breach of the mortgage condition is9
not cured within the time and in the manner specified in the notice; and10
(6) that the mortgagor will be entitled to be sent notice of the foreclosure11
sale at least 60 days prior to the sale and to redeem the mortgaged property at12
any time prior to the sale by paying the full amount due under the mortgage,13
including the costs and expenses of the sale.14
(c)(1) The following notice of intent to foreclose form may be used and15
may be altered as circumstances require:16
PLEASE TAKE NOTICE that you have defaulted under Loan No.17
__________ by [mortgage condition breached] required by your Promissory18
Note dated __________, 20___. This default also constitutes a breach of the19
Mortgage, dated __________, 20___, recorded in Volume ___ at Page ___ of20
the Land Records, which secures the Loan. As a result of your default, we21
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VT LEG 266061.1
have accelerated the maturity of all indebtedness due on the Loan and secured1
by the Mortgage, totaling $__________ as of today’s date. In order to cure2
this default, you must pay to us on or before __________ [a date not less than3
thirty (30) days after the date of this Notice] the sum of $__________, plus4
interest at the rate of $__________ per day to the date of payment. If you do5
not cure this default by making the payments required, it is our intention to6
foreclose by exercising the power of sale contained in the above Mortgage.7
You will be sent notice of the foreclosure sale at least sixty (60) days prior to8
the sale, and you will be entitled to redeem your interest in the mortgaged9
property at any time prior to the sale by paying the full amount due under the10
Mortgage, including the costs and expenses of the sale. If you do not cure the11
default or redeem your interest, your ownership of the mortgaged property will12
be terminated.13
(2) This subsection shall not be construed to prevent the use of other14
forms except that all notices shall comply with the provisions of subsection (b)15
of this section.16
§ 4963. PUBLICATION OF NOTICE OF SALE17
Notice of a sale conducted pursuant to this subchapter shall be published18
once in each of three successive weeks, in a newspaper of general circulation19
in the town where the land lies, the first publication to be not less than 21 days20
before the day of sale.21
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VT LEG 266061.1
§ 4964. RECORDING1
The mortgagee shall record the notice of sale in the land records of the town2
or city where the land lies not less than 60 days prior to the sale. The filing of3
the notice of the sale shall be in lieu of filing a foreclosure complaint under4
section 4932 of this title and shall be sufficient notice of the pendency of the5
nonjudicial foreclosure by power of sale to all persons who acquire any interest6
or lien in the mortgaged property between the dates of recording the notice of7
sale and recording the foreclosure deed. Without further notice or service,8
those persons shall be bound by the power of sale and the foreclosure deed and9
shall be foreclosed from all rights or equity in the mortgaged property.10
§ 4965. SERVICE; FORM11
(a)(1) In all cases, unless service is waived under subsection 4966(g) of this12
title, a copy of the notice of sale shall be served on the mortgagor or his or her13
representative in interest by:14
(A) sending the notice by registered or certified mail addressed to the15
mortgagor or such representative at his or her last known address, or to such16
person and address as may be agreed upon in said mortgage, at least 60 days17
before said sale; or18
(B) serving the notice in any manner authorized by the Vermont19
Rules of Civil Procedure.20
(2) As used in the section, “mortgagor” shall mean the mortgagor or the21
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VT LEG 266061.1
then record owner of the mortgaged property.1
(b)(1) A copy of the notice of sale shall be sent to any tenant lawfully2
occupying the mortgaged property and to any person having a recorded interest3
in the mortgaged property of record which will be foreclosed by the sale,4
provided that the interest is recorded in the applicable land records prior to the5
recording of the notice of sale. The notice required by this subsection shall be6
sent not less than 60 days before the sale. Notice to a tenant shall be sufficient7
if mailed to the tenant by first class mail at the address specified in the lease, if8
recorded, or to the occupant at the address of the mortgaged property, if the9
lease is not recorded.10
(2) Compliance with this subsection shall be sufficient with respect to11
persons entitled to receive notice under subdivision (1) of this subsection, and12
the failure to give additional notice shall not be grounds to invalidate the sale.13
Any mortgagor or junior lienholder who refuses to accept or claim mailed or14
served notice or who frustrates attempts by the mortgagee to give notice of the15
sale by failing to give or leave a forwarding address or by other acts or16
omissions shall be deemed to be notified of the sale, provided that such17
mortgagee shall have made a good faith effort to provide such notice.18
(c)(1) The following notice of sale form may be used and may be altered as19
circumstances require:20
By virtue and in execution of the Power of Sale contained in a certain21
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VT LEG 266061.1
mortgage given by __________ to __________ dated __________ and1
recorded in Volume __________ Page __________ of the land records of the2
town of __________, of which mortgage the undersigned is the present holder,3
(if by assignment, or in any fiduciary capacity, give reference) for breach of4
the conditions of said mortgage and for the purpose of foreclosing the same5
will be sold at Public Auction at __________ o’clock, ___ M. on the6
__________ day of __________ 20____, (place) __________ at the mortgaged7
property.8
To wit: (Legal description of the mortgaged property and in case of partial9
releases, state exceptions.)10
Terms of sale: (State here the amount, if any, to be paid in cash by the11
purchaser at the time of the sale, and the schedule for payment of the balance.)12
The mortgagor and all junior lienholders are entitled to redeem the mortgaged13
property at any time prior to the sale by paying the full amount due under the14
mortgage, including the costs and expenses of the sale.15
Other terms to be announced at the sale or inquire at __________16
(Signed) _________________________________17
Mortgagee (may be signed by mortgagee’s attorney)18
__________ 20__19
(2) This subsection shall not be construed to prevent the use of other20
forms. A notice of sale shall be sufficient if it fully sets forth the date, time,21
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VT LEG 266061.1
and place of sale; the town, county, street or highway and street number, if1
any, of the mortgaged premises; the date of the mortgage; the volume and page2
of the recording of the mortgage; the terms of the sale; the statement language3
required by subdivision (d)(1) of this section; and notice of the right to redeem.4
(d)(1) The notice of the sale shall include the following statement: “The5
mortgagor and all junior lienholders are hereby notified that at any time before6
the foreclosure sale, the mortgagor and all junior lienholders have a right to7
petition the superior court for the county in which the mortgaged property is8
situated, with service upon the mortgagee, and upon such bond as the court9
may require, to enjoin the scheduled foreclosure sale. Failure to institute such10
petition and complete service upon the foreclosing party, or the party’s agent,11
conducting the sale prior to sale shall thereafter bar any action or right of12
action of the mortgagor or any junior lienholder based on the validity of the13
foreclosure, the right of the mortgagee to conduct the foreclosure sale, or14
compliance by the mortgagee with the notice requirements and other15
conditions of this section. An action to recover damages resulting from the16
sale of the mortgaged property on the date of the sale may be commenced at17
any time within one year following the date of the sale, but not thereafter.”18
(2) The mortgagor and all junior lienholders shall have the rights19
contained in the notice provided for in this subsection.20
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VT LEG 266061.1
§ 4966. CONDUCT AND LOCATION OF SALE1
(a) The sale shall be held at the mortgaged property except that it may be2
held elsewhere if agreed to in writing by the mortgagor and the mortgagee not3
less than 60 days nor more than 90 days before the sale. At the sale, the4
mortgaged property shall be sold to the highest bidder in conformance with the5
terms of sale set forth in the foreclosure notice.6
(b) The mortgagor shall be entitled to redeem the mortgaged property at7
any time prior to the sale by paying to the mortgagee the full amount due under8
the mortgage, including the costs and expenses of the sale.9
(c) The public sale may be adjourned one or more times for a total time not10
exceeding 60 days by announcement of the new sale date to those present at11
each adjournment or by posting notice of the adjournment in a conspicuous12
place at the location of the sale. Written notice of the new sale date shall also13
be given by first class mail, postage prepaid, to any person who received notice14
of the sale pursuant to section 4965 of this title.15
(d) Permitted bidders at the sale shall include, without limitation, the16
mortgagee, the mortgagor, or any subsequent lien holder. All bidders, except17
for the mortgagee, shall meet the requirements set forth in the notice of sale in18
order to bid at the sale.19
(e) In the event that the proceeds of sale, after first deducting the20
reasonable expenses incurred in making the sale, exceed the amounts due to21
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VT LEG 266061.1
the mortgagee at the time of sale, the surplus shall be paid to other lien holders1
of record in the order of the priority of their liens. In the event that the2
proceeds of sale exceed the amount due to the mortgagee and the amounts due3
to the other lien holders, the excess shall be paid to the mortgagor. The4
mortgagee or person conducting the sale may interplead any sale proceeds in5
excess of the indebtedness and expenses secured by the mortgage in the event6
there are any liens of record against the real estate.7
(f) This section shall not preclude the mortgagee from maintaining a8
subsequent action against the mortgagor for any deficiency.9
(g) No foreclosure sale shall be invalid or ineffectual to foreclose a10
mortgage under this section if, before or after the foreclosure sale, a party11
entitled to receive notice of the sale waives his or her right to such notice. A12
waiver of notice authorized or validated under this section shall be recorded in13
the land records in the town or city where the property is located.14
§ 4967. RECORDING FOLLOWING SALE15
(a) Within 90 days after the sale, the mortgagee selling pursuant to the16
power shall cause the foreclosure deed and an accompanying affidavit to be17
recorded in the land records of the town where the property is situated. The18
affidavit setting forth fully and particularly the mortgagee’s acts with respect to19
the sale of the mortgaged property, including the dates that notices of the sale20
were published, and shall set forth facts showing that no person in interest is in21
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VT LEG 266061.1
the military service as defined in the Service Members Civil Relief Act of1
2003. The affidavit or a duly certified copy thereof shall be admissible in2
evidence on the issue of whether the power of sale was duly executed.3
(b) If the recording required by this section is prevented by an order or stay4
of any court, the time for such recording shall be extended until 10 days after5
the expiration or removal of such order or stay.6
(c) If the recording required by this section is made more than 60 days after7
the sale, the affidavit shall state why the recording was not made earlier.8
(d) Failure to record the deed and affidavit within the statutory period9
required by this subsection shall render the sale void and of no effect only as to10
liens or other encumbrances of record intervening between the day of the sale11
and the time of recording of said deed and affidavit.12
(e) Correction of error. In case of an alleged error or omission in the13
affidavit, the court, on petition and after notice to interested parties, may14
validate the affidavit or authorize the recording of an affidavit amending,15
correcting or in substitution for an affidavit so recorded, and the affidavit so16
authorized to be recorded or a certified copy of the record thereof shall have17
the same effect and shall be admitted in evidence as if it had been recorded18
within the 90-day period required by this section.19
§ 4968. TRANSFER OF TITLE20
Title to the foreclosed mortgaged property under this section shall not pass21
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VT LEG 266061.1
to the purchaser until the time of the recording of the deed and affidavit. Upon1
such recording, title to the mortgaged property shall pass to the purchaser free2
and clear of all interests and encumbrances which do not have priority over3
such mortgage.4
§ 4969. FAILURE OF SALE, RESALE5
If the purchaser does not pay the balance of the purchase price according to6
the terms of the sale, and at the option of the mortgagee, the down payment, if7
any, shall be forfeited and the foreclosure sale shall be void.8
§ 4970. FORM AND EFFECT OF FORECLOSURE DEED9
(a) The foreclosure deed shall be in substantially the following form:10
__________ of __________ County, __________ State of __________, holder11
of a mortgage from __________ to __________ dated __________, recorded12
in __________ Book___ at Page___ of the Town of ____ Land Records, by13
the power conferred by said mortgage and every other power, for___ dollars14
paid, grant to __________, (complete mailing address) __________, of15
__________Street, Town (City) of __________, __________ County, State of16
__________, the premises conveyed by said mortgage.17
(Here add acknowledgment)18
(b) A deed substantially in the form set forth in subsection (a) of this19
section shall, when duly executed and delivered, have the force and effect of a20
deed in fee simple to the grantee, heirs, successors and assigns, to their own21
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VT LEG 266061.1
use, with covenants on the part of the mortgagee, for himself or herself, that, at1
the time of the delivery of such deed, the mortgagee was duly authorized to2
make sale of the mortgaged property; that in all of the mortgagee’s3
proceedings in the sale thereof, the mortgagee has complied with the4
requirements of this subchapter; and that the mortgagee will warrant and5
defend the same to the grantee, heirs, successors, and assigns against the lawful6
claims of all persons claiming by, from, or under him or her.7
Sec. 2. REPEAL8
Subchapter 6 of Chapter 163 of Title 12 (foreclosure of mortgages) is9
repealed.10
Sec. 3. EFFECTIVE DATE; APPLICABILITY11
This act shall take effect on July 1, 2011 and shall apply to any mortgage12
foreclosure proceeding instituted after that date.13
Sec. 1. 12 V.S.A. chapter 172 is added to read:
CHAPTER 172. FORECLOSURE OF MORTGAGES
Subchapter 1. General Provisions
§ 4931. DEFINITIONS
As used in this chapter:
(1) “Agricultural activity” includes the growing, raising, and
production of horticultural and silvicultural crops, grapes, berries, trees, fruit,
poultry, livestock, grain, hay, and dairy products.
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VT LEG 266061.1
(2) “Dwelling house” means a residential structure or mobile home
which contains one to four family housing units, or individual units of
condominiums or cooperatives, each of which is used or intended to be used as
a residence.
(3) “Farmland” means land devoted primarily to commercial
agricultural activities.
(4) “Value” means market value less all reasonable expenses that
would be incurred in selling the property. Market value for purposes of this
section may be determined based on evidence of market value deemed by the
court to be reasonably reliable, which may include grand list valuation and the
common level of appraisal used in the town where the property is located, if
the court finds such evidence to be reasonably reliable.
§ 4932. VENUE; JOINDER OF PARTIES; RECORDING
(a) Actions to foreclose a mortgage under subchapter 2 or 3 of this chapter
shall be brought in the civil division of the superior court for the county where
the land lies, or, if the land described in the mortgage lies in more than one
county, then in one of the counties in which the land lies.
(b) The plaintiff shall file a copy of the complaint in the town clerk’s office
in each town where the mortgaged property is located. The clerk of the town
shall minute on the margin of the record of the mortgage that a copy of
foreclosure proceedings on the mortgage is filed. The filing shall be sufficient
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VT LEG 266061.1
notice of the pendency of the action to all persons who acquire any interest or
lien on the mortgaged premises between the dates of filing the copy of
foreclosure and the recording of the final judgment in the proceedings.
Without further notice or service, those persons shall be bound by the
judgment entered in the cause and be foreclosed from all rights or equity in the
premises as completely as though they had been parties in the original action.
(c) If the mortgaged property is subject to a residential rental agreement,
as defined in 9 V.S.A. § 4451:
(1) The plaintiff shall join as a party defendant any person occupying
the mortgaged property pursuant to a residential rental agreement as of the
date the copy of the complaint is recorded in the land records. Service of the
complaint on the tenant shall be sufficient if mailed to the tenant by first class
mail at the address specified in the rental agreement, if the agreement is
recorded, or to the “occupant” at the address of the leased premises if the
agreement is not recorded.
(2) The summons and complaint served on any person occupying the
premises pursuant to a residential rental agreement shall contain the following
notice, written in at least 14-point type:
THE PROPERTY IN WHICH YOU LIVE IS BEING FORECLOSED
UPON. YOU ARE NAMED AS A DEFENDANT IN THE
FORECLOSURE BECAUSE YOUR RIGHT TO REMAIN ON THE
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VT LEG 266061.1
PREMISES MAY END WHEN THE FORECLOSURE IS
COMPLETED. YOU MUST NOTIFY THE COURT OF YOUR
NAME AND ADDRESS IN ORDER TO BE KEPT INFORMED OF
THE STATUS OF THE FORECLOSURE.
(3) Upon receipt of the complaint, the owner of the mortgaged property
shall notify each tenant who enters into a residential rental agreement that the
premises are the subject of a pending foreclosure action and that, in the event
the owner is unable to redeem the premises, the tenant may be required to
vacate the premises upon 30 days’ notice, or upon such other notice as is
required by federal law, whichever is longer. The failure of the owner to
provide notice under this subsection shall not affect or invalidate the
foreclosure action.
(d) All proceedings shall be before the superior judge alone, and trial shall
be without jury.
§ 4933. NOTICE TO COMMISSIONER OF BANKING, INSURANCE,
SECURITIES, AND HEALTH CARE ADMINISTRATION
(a) When the mortgage holder files an action under subchapter 2 or 3 of
this chapter to foreclose upon an owner-occupied dwelling house, the
mortgage holder shall simultaneously file a notice of foreclosure with the
commissioner of banking, insurance, securities, and health care
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VT LEG 266061.1
administration. The commissioner may require that the notice of foreclosure
be sent in an electronic format. The notice of foreclosure shall include:
(1) the name and current mailing address of the mortgagor;
(2) the address of the property being foreclosed;
(3) the name of the current mortgage holder, along with the address and
telephone number of the person or entity responsible for workout negotiations
concerning the mortgage;
(4) the name of the original lender, if different;
(5) the name, address, and telephone number of the mortgage servicer,
if applicable; and
(6) any other information the commissioner may require.
(b) The court clerk shall not accept a foreclosure complaint for filing
without a certification by the plaintiff that the notice of foreclosure has been
sent to the commissioner of banking, insurance, securities, and health care
administration in accordance with subsection (a) of this section.
(c) Acceptance of a foreclosure complaint by the court clerk that, due to a
good faith error or omission by the plaintiff or the clerk, does not contain the
certification required in subsection (a) of this section shall not invalidate the
foreclosure proceeding, provided that the plaintiff files the required notice
with the commissioner within 10 days of obtaining knowledge of the error or
omission.
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VT LEG 266061.1
§ 4934. SUPPLEMENTAL JUDGMENT JOINING PARTIES; RECORDING
At any time, without further notice or service on the purchaser or
mortgagor or lienholder whose interest in the property being foreclosed first
arose after the filing of the complaint in the town clerk’s office, and upon filing
certified copies of the deed, mortgage, or attachment with the clerk of the court
by the plaintiff in the foreclosure action, any superior judge may sign a
supplemental judgment specifically naming that party. Reference to the deed,
mortgage, or lien and the supplemental judgment may be filed in the town
clerk’s office for record, and it shall have the same force and effect as though
that person had been made a party defendant in the original action.
§ 4935. TAXES PAID BY MORTGAGEE
A tax assessed upon mortgaged real estate in this state may be paid by the
mortgagee or assignee of the mortgage upon such property. The amount so
paid, including costs, if any, shall thereupon be added to and become a part of
the debt or obligation secured by such mortgage.
§ 4936. FORECLOSURE OF REAL OR PERSONAL PROPERTY
A mortgage or a security agreement constituting a lien on both real and
personal property to secure the payment of a debt, whether evidenced by one
or more instruments, may be foreclosed in an action under subchapter 2 or 3
of this chapter.
§ 4937. ATTORNEY’S FEES
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VT LEG 266061.1
When a mortgage contains an agreement on the part of the mortgagor to
pay the mortgagee, in the event of foreclosure, the attorney’s fees incident
thereto, and claim is made therefor in the complaint, upon hearing, the court
in which the complaint is brought shall allow such fee as in its judgment is
just.
§ 4938. EFFECT ON BANKRUPTCY PROCEEDINGS
Nothing in this chapter shall be construed to supersede any provision of
Title 11 of the United States Code.
§ 4939. APPEALS
When a judgment is for the foreclosure of a mortgage, permission of the
court shall be required for review.
Subchapter 2. Strict Foreclosure
§ 4941. DECREE FORECLOSING EQUITY OF REDEMPTION; WRIT OF
POSSESSION
(a) In any action for foreclosure with regard to any mortgage encumbering
property, the court may, if no sale is requested by the plaintiff or ordered by
the court pursuant to subsection (b) of this section, issue a judgment and
decree of foreclosure without requiring a judicial sale of the premises.
(b) In an action brought under subsection (a) of this section, any party may
by written motion request, or the court in its discretion may order, that
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VT LEG 266061.1
property be sold at a judicial foreclosure sale, whether or not the mortgage
contains a power of sale.
(c) No decree foreclosing the right of redemption without sale shall be
issued absent a finding by the court that there is no substantial value in the
property in excess of the mortgage debt found by the court to be due to the
plaintiff and any other lienholder, plus assessed but unpaid property taxes due
on the property. The court shall include in its order a summary of the evidence
upon which its finding is based.
(d) If a decree is issued foreclosing the right of redemption without sale,
the time of redemption shall be six months from the date of the decree unless a
shorter time is ordered, or the mortgagor and mortgagee plaintiff agree to a
shorter period. The court shall fix the period of redemption taking into
consideration whether there is value in the property in excess of the mortgage
debt and debt owed to junior lienholders, any assessed but unpaid property
taxes, the condition of the property, and any other equities.
(e) If the premises are not redeemed agreeably to the decree, the clerk of
the court shall issue a writ of possession at the plaintiff’s request. Such writ
shall have the same force and effect and be executed in the same manner as
similar writs issued after judgment by a court of law in ejectment proceedings.
Where the premises are occupied by a residential tenant, the writ shall be
served on the tenant, and the plaintiff shall be placed in possession of the
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VT LEG 266061.1
property without further proceedings no sooner than 30 days after the writ is
served, or upon such other time as is required by federal law, whichever is
longer.
(f)(1) In an action for foreclosure under this section, if a lien or interest in
such realty is held by any person or federal agency which may not be
foreclosed by strict foreclosure pursuant to federal law, the court shall
proceed in accordance with subchapter 3 of this chapter.
(2) In an action for foreclosure, if a lien or interest in such realty is held
by any person or federal agency which may not be foreclosed by strict
foreclosure pursuant to federal law, a decree may be entered providing for
such period of redemption as the court may determine, and providing for a
sale of the mortgaged premises at the conclusion of such period if the premises
are not redeemed, and for the time, manner, and notice of sale, if required, and
the application of any proceeds.
(g) In an action for foreclosure under this section, where the time of
redemption has expired, the party obtaining the foreclosure shall cause a
certified copy of the judgment and the certificate of nonredemption to be
recorded in the office where by law a deed of the lands is required to be
recorded.
(h) If the plaintiff complies with subsection (g) of this section, the
expiration of the right of redemption under the decree shall foreclose the
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VT LEG 266061.1
interest of subsequent purchasers, mortgagees, or attaching creditors whose
interest in the property being foreclosed first arose after the filing of the
complaint for foreclosure in the land records as provided in section 4932 of
this chapter.
Subchapter 3. Foreclosure by Judicial Sale
§ 4945. JUDICIAL SALE FORECLOSURE
(a) All liens and mortgages affecting real property may, on the written
motion of any party to any suit for foreclosure of such liens or mortgages, or at
the discretion of the court before which the foreclosure proceedings are
pending, be foreclosed by a judicial foreclosure sale, even if the mortgage does
not contain a sale provision instead of a strict foreclosure.
(b) In an action for foreclosure, if a lien or interest in such realty is held by
any person or federal agency which may not be foreclosed by strict foreclosure
pursuant to federal law, a decree may be entered providing for such period of
redemption as the court may determine, and providing for a sale of the
mortgaged premises at the conclusion of such period if said premises are not
redeemed, and for the time, manner, and notice of sale, if required, and the
application of the proceeds therefrom.
§ 4946. PROCEDURE
(a) Order for judicial sale. Upon entry of a decree of judicial sale
foreclosure, the court shall order that the mortgaged property be sold at a
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VT LEG 266061.1
public sale if it is not redeemed within the time period allowed by the court.
The public sale shall be conducted on or before six months from the expiration
of the last redemption date set forth in the decree unless extended by the court
or stayed by a bankruptcy filing. The time and manner of the sale shall be
specified in the notice of sale required by section 4952 of this title.
(b) Time for redemption; owner-occupied dwelling house or farmland. If a
decree is made foreclosing the right of redemption by judicial sale with respect
to farmland or a dwelling house that is occupied by the owner as his or her
principal residence at the time the plaintiff applies for entry of judgment, the
time of redemption shall be established by the court and shall be six months
from the date of the decree, unless a shorter time is ordered by the court. The
court shall fix the period of redemption taking into consideration whether
there is value in the mortgaged property in excess of the mortgage debt and
debt owed to junior lienholders, any assessed but unpaid property taxes, the
condition of the mortgaged property, and any other equities. No sale of a
dwelling house when occupied by the owner as his or her principal residence
at the time the plaintiff applies for entry of judgment may take place within
seven months of service of the foreclosure complaint, unless the court orders a
shortened redemption period pursuant to this section or the plaintiff and the
mortgagor mutually agree to a shorter period after commencement of the
action to foreclose the mortgage.
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(c) Time for redemption; other property. If a decree is made foreclosing the
right of redemption by judicial sale with respect to any property other than
farmland or a dwelling house that is occupied by the owner as his or her
principal residence at the time the plaintiff applies for entry of judgment, the
redemption period shall be eliminated or reduced by the court to no more than
30 days.
(d) Writ of possession. Upon expiration of the period of redemption in the
decree, other than farmland or a dwelling house when currently occupied by
the owner as his or her principal residence, if the mortgagor or the
mortgagor’s successors, heirs, or assigns have not redeemed the mortgage,
any remaining rights of the mortgagor to possession shall terminate, and the
clerk of the court shall issue a writ of possession at the plaintiff’s request and
upon court approval. In the case of farmland or a dwelling house currently
occupied by the owner as his or her principal residence when the period of
redemption in the decree expires, the clerk shall issue a writ of possession at
the plaintiff’s request and upon approval of the court. Such writ shall have the
same force and effect and be executed in the same manner as similar writs
issued after judgment by a court of law in ejectment proceedings. Where the
mortgaged property is occupied by a residential tenant, the writ shall be
served on the tenant, and the plaintiff shall be placed in possession of the
mortgaged property without further proceedings no sooner than 30 days after
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the writ is served, or upon such other time as is required by federal law,
whichever is longer.
§ 4947. FORECLOSURE OF EQUITY OF REDEMPTION; RECORDING
(a) In an action for foreclosure under this subchapter where the time of
redemption has expired, the party obtaining the foreclosure shall cause a
certified copy of the judgment and the certificate of nonredemption to be
recorded in the office where by law a deed of the lands is required to be
recorded.
(b) If the plaintiff complies with subsection (a) of this section, the
expiration of the right of redemption under the decree shall foreclose the
interest of subsequent purchasers, mortgagees, or attaching creditors whose
interest in the property being foreclosed first arose after the filing of the
complaint for foreclosure in the land records as provided in section 4932 of
this chapter.
§ 4948. REINSTATEMENT OF MORTGAGE PRIOR TO SALE
(a) Upon agreement of the mortgagor and mortgagee, the mortgagor may
reinstate or modify the loan after the expiration of the redemption period set
forth in the judgment order but before the public sale. Upon reinstatement or
modification of the loan, the mortgagee shall execute a waiver of foreclosure
and, after receiving court approval, record it in the land records of the city or
town where the mortgaged property lies. Upon recording, the waiver of
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foreclosure shall operate to terminate the foreclosure and restore the parties
and all junior lienholders to the positions they held prior to the filing of the
foreclosure, as amended by any modification agreement between the
mortgagor and mortgagee.
(b) The following form of waiver of foreclosure may be used. Nothing
herein shall be construed to prevent the use of other forms or to prevent
alteration of the form as circumstances require:
WAIVER OF FORECLOSURE
MORTGAGEE, holder of record of a mortgage deed dated ________, 20____
and of record in Book ___ at Page ____ of the City/Town of __________
Land Records (“the Mortgage”) executed and delivered to it by
MORTGAGOR(S) covering real estate located in the Town of _________ ,
Vermont hereby acknowledges and agrees:
1. For the breach of the condition of the Mortgage, MORTGAGEE
initiated a foreclosure action against MORTGAGOR by Complaint for
Foreclosure dated _____________, 20____ which is of record in Book
_____at Page _____ of the Town of _____ Land Records.
2. That MORTGAGOR(S) has/have now cured the default and requested
reinstatement of the Mortgage and the MORTGAGEE agrees to
reinstate the mortgage, as amended by any modification agreement
between the mortgagor and mortgagee.
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NOW THEREFORE, MORTGAGEE does hereby acknowledge that it has
received payment of the arrearages due it under the Mortgage and the
promissory note which it secures, and in consideration thereof, does hereby
waive the above-entitled foreclosure action and release unto said
MORTGAGOR, his/her/its heirs, personal representatives, successors, and
assigns, all claims asserted in the foreclosure action. THE MORTGAGE IS
NOT DISCHARGED.
This waiver is given pursuant to 12 V.S.A. § 4948. This waiver shall have no
effect on the Mortgage referenced above other than to reinstate the same, as
amended by any agreement between the mortgagor and mortgagee, and the
rights of all parties named in the foreclosure action, as well as the rights of
any junior lienholders, remain intact, except as amended by any agreement
between the mortgagor and mortgagee, as if no foreclosure had been
commenced.
IN WITNESS WHEREOF, the said MORTGAGEE has caused this instrument
to be executed by its duly authorized agent this ____ day of ________ , 20___.
MORTGAGEE
By: _____________________________________
Its Duly Authorized Agent
Printed Name: _______________________
State of _____________
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County of ____________________
At _________________ in said County and State, then personally appeared
the above-named duly authorized agent who acknowledged the foregoing
waiver of foreclosure to be his/her free act and deed and the free act and deed
of the MORTGAGEE.
Before me, _______________________
Printed Name:__________________________
Notary Public
My Commission expiration ____________________
*****************************************************
The request for waiver of foreclosure is SO ORDERED this ____ day
of _________________________, 20 ____.
______________________________
Superior Court Judge
§ 4949. MORTGAGOR’S REDEMPTION PRIOR TO JUDICIAL SALE
(a) The mortgagor is entitled to redeem the premises at any time prior to
the public sale by paying the full amount due under the judgment order and
such other amounts, including costs and expenses of sale, accruing
postjudgment as agreed upon by the mortgagor and mortgagee or ordered by
the court.
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(b) Upon agreement of the parties, the mortgagor may redeem the premises
at any time prior to the public sale by paying less than the full amount due
under the judgment order. In such case, the parties to the foreclosure shall,
with court approval, amend the redemption amount. Upon payment of the
amended redemption amount, the court shall issue a Supervening Certificate of
Redemption as evidence that the judgment amount was redeemed. Upon the
recording of a certified copy of the Supervening Certificate of Redemption in
the land records, the foreclosed mortgage shall be of no further force or effect
and any junior lienholder shall return to the position it held prior to the filing
of the foreclosure.
(c) The redemption right established by this section shall be in addition to
the redemption right set forth in the decree.
§ 4950. [Reserved.]
§ 4951. JUDGMENT VACATED
Notwithstanding any provision to the contrary in this chapter or other law,
the mortgagor and mortgagee may stipulate and move to vacate the judgment
at any time prior to the public sale. If the court approves the motion, the
judgment shall be vacated and all parties, the property, and any lienholders of
record in the land records will be restored to their original positions as if no
foreclosure had been commenced and no judgment entered. Notwithstanding
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any other provision of law, this section will apply retroactively and apply to
orders to vacate in existence on the effective date of this section.
§ 4952. SALE PROCEDURES
(a) Generally. If the mortgaged property is not redeemed, the plaintiff
shall sell the mortgaged property in accordance with this section, complying
with all court orders and applicable power of sale provisions.
(b) Notice of sale; publication. Notice of sale shall be published once in
each of three successive weeks in a newspaper of general circulation in the
town where the land lies, the first publication to be no fewer than 21 days
before the day of sale.
(c) Notice of sale; service. A copy of the notice of sale shall be mailed by
first class mail, postage prepaid, to all parties who appeared in the foreclosure
action or to their attorneys of record. If the mortgagor has not appeared in the
foreclosure action, a copy of the notice of sale shall also be mailed by first
class mail, postage prepaid, to the mortgagor at the mortgagor’s last known
address. The notice of sale shall include the specific date, time, and location
of the sale and shall be mailed after the last date of redemption in the decree
but no fewer than 30 days before the date of the sale.
(d) Notice of sale; waiver. Any party entitled to be sent notice under this
section may, either before or after the foreclosure sale, waive the party’s right
to receive notice, in which case no foreclosure sale shall be invalid or
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VT LEG 266061.1
ineffectual to foreclose that party’s rights under the mortgage. This subsection
shall not apply to farmland or to a dwelling house unless approved by the
court at or before the confirmation of sale.
(e) Notice of sale; form. The following form of notice of sale may be used
and may be altered as circumstances require, but nothing herein shall be
construed to prevent the use of other forms:
By virtue and in execution of the Power of Sale contained in a certain
mortgage given by ______________ to _______________dated
______________________ and recorded in Volume ______, Page _________
of the land records of the municipality of ______________, of which
mortgage the undersigned is the present holder (if by assignment, or in any
fiduciary capacity, give reference) for breach of the conditions of said
mortgage and for the purpose of foreclosing the same will be sold at Public
Auction at _______________ (place) at ______ o’clock , ___M. on the
_______day of _________, 20____all and singular the premises described in
said mortgage,
(In case of partial releases, state exceptions.)
To wit: (Legal description of the premises.)
Terms of sale: (State here the amount, if any, to be paid in cash by the
purchaser at the time of the sale, and the schedule for payment of the balance
and other terms of sale.)
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The mortgagor is entitled to redeem the premises at any time prior to the sale
by paying the full amount due under the mortgage, including the costs and
expenses of the sale.
Other terms to be announced at the sale or inquire at __________
Signed: ____________________________
Mortgagee (may be signed by mortgagee’s attorney)
Dated: ________________________________, 20____.
§ 4953. CONDUCT AND LOCATION OF SALE
(a) Location. The sale shall be held at the mortgaged property unless
another place for sale is directed by the court. At the sale, the mortgaged
property shall be sold to the highest bidder in conformance with the terms of
sale set forth in the notice of sale.
(b) Adjournments. The public sale may be adjourned one or more times for
a total time not exceeding 30 days, without further court order, and without
publication or service of a new notice of sale, by announcement of the new sale
date to those present at each adjournment or by posting notice of the
adjournment in a conspicuous place at the location of the sale. Notice of the
new sale date shall also be sent by first class mail, postage prepaid, to the
mortgagor at the mortgagor’s last know address at least five days before the
new sale date. The public sale may be adjourned for a period of time in excess
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VT LEG 266061.1
of 30 days by agreement of the mortgagor and mortgagee or by order of the
court.
(c) Permitted bidders. Any person may bid at the sale. All bidders, except
for the mortgagee plaintiff or designee, shall meet the requirements set forth in
the notice of sale in order to bid at the sale.
§ 4954. PROCEDURE FOLLOWING SALE
(a) Confirmation order. Following the sale, the plaintiff shall file with the
court a report on oath of the sale, together with a request for confirmation of
the sale, which shall include an accounting of the sale proceeds, and a
proposed order confirming the sale. Copies of the report of the sale and
request for confirmation shall be mailed by first class mail, postage prepaid, to
all parties who appeared in the foreclosure action or to their attorneys of
record and to the mortgagor at the mortgagor’s last known address. The court
may issue an order of confirmation of the sale without hearing, unless the
court in its discretion determines that a hearing is necessary. The order of the
court confirming the sale shall be conclusive evidence as against all persons
that the foreclosure and sale were conducted in accordance with this section.
(b) Transfer of title. The confirmation order shall be recorded in the land
records of the town where the mortgaged property is located and shall transfer
title to the mortgaged property to the purchaser upon recording.
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VT LEG 266061.1
(c) Disbursement of proceeds. In the event that the proceeds of the sale,
after first deducting the reasonable expenses incurred in making the sale,
exceed the amounts due to the plaintiff at the time of sale, the confirmation
order shall provide for the payment of the surplus to other lienholders of
record in the order of the priority of their liens. In the event that the proceeds
of the sale exceed the amount due to the plaintiff and the amount due to the
other defendants, the excess shall be paid to the defendant mortgagor.
(d) Deficiency. The plaintiff may request a deficiency judgment in the
foreclosure complaint. The court may assess a judgment against the
mortgagor for the deficiency if the proceeds of sale are insufficient to meet the
expenses incurred in making the sale and the amount due to the plaintiff. If the
plaintiff seeks a deficiency judgment, it shall be requested prior to issuance of
the confirmation order. Failure to request a deficiency judgment shall be
deemed a waiver of any deficiency judgment against a mortgagor.
(e) Failure of sale; resale. In the event that the purchaser fails to pay the
balance of the purchase price according to the terms of the sale, then, upon the
request of the plaintiff, the down payment shall be forfeited and the court shall
issue an order vacating the confirmation order. Upon motion and after
hearing, the court may issue a confirmation order to the second highest bidder.
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VT LEG 266061.1
Subchapter 4. Foreclosure by Nonjudicial Sale
§ 4961. POWER OF NONJUDICIAL SALE
Whether or not a power of sale is contained in a mortgage relating to any
property, except for farmland or a dwelling house owned by a natural person,
instead of a suit and decree of foreclosure, the mortgagee may, upon breach of
mortgage condition, foreclose upon the property without first commencing a
foreclosure action or obtaining a foreclosure decree by complying with the
terms of this subchapter. No sale under and by virtue of a nonjudicial power
of sale shall be valid and effectual to foreclose the mortgage unless the
conditions of this subchapter are complied with.
§ 4962. NOTICE OF INTENTION TO FORECLOSE
(a) At least 30 days prior to service of a notice of sale pursuant to
subsection 4952(c) of this title, notice of intention to foreclose in a writing
complying with this section shall be sent to the mortgagor by registered or
certified mail at his or her last known address.
(b) The writing required by this section shall state, in a manner calculated
to make the mortgagor aware of the situation:
(1) the mortgage to be foreclosed;
(2) the mortgage condition claimed to have been breached;
(3) that the mortgagee has accelerated maturity of the debt secured by
the mortgage, if that is the case;
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VT LEG 266061.1
(4) the amount to be paid or other action necessary to cure, and the time
within which the cure must take place, which shall be not less than 30 days
after the date of the notice of intention to foreclose;
(5) the intention of the mortgagee to foreclose by exercising the power
of sale contained in the mortgage, if the breach of the mortgage condition is
not cured within the time and in the manner specified in the notice; and
(6) that the mortgagor will be entitled to be sent notice of the
foreclosure sale at least 60 days prior to the sale and to redeem the mortgaged
property at any time prior to the sale by paying the full amount due under the
mortgage, including the costs and expenses of the sale.
(c)(1) The following notice of intent to foreclose form may be used and may
be altered as circumstances require:
PLEASE TAKE NOTICE that you have defaulted under Loan No.
__________ by [mortgage condition breached] required by your Promissory
Note dated __________, 20___. This default also constitutes a breach of the
Mortgage, dated __________, 20___, recorded in Volume ___ at Page ___ of
the Land Records, which secures the Loan. As a result of your default, we
have accelerated the maturity of all indebtedness due on the Loan and secured
by the Mortgage, totaling $__________ as of today’s date. In order to cure
this default, you must pay to us on or before __________ [a date not less than
thirty (30) days after the date of this Notice] the sum of $__________, plus
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VT LEG 266061.1
interest at the rate of $__________ per day to the date of payment. If you do
not cure this default by making the payments required, it is our intention to
foreclose by exercising the power of sale contained in the above Mortgage.
You will be sent notice of the foreclosure sale at least sixty (60) days prior to
the sale, and you will be entitled to redeem your interest in the mortgaged
property at any time prior to the sale by paying the full amount due under the
Mortgage, including the costs and expenses of the sale. If you do not cure the
default or redeem your interest, your ownership of the mortgaged property will
be terminated.
(2) This subsection shall not be construed to prevent the use of other
forms except that all notices shall comply with the provisions of subsection (b)
of this section.
§ 4963. PUBLICATION OF NOTICE OF SALE
Notice of a sale conducted pursuant to this subchapter shall be published
once in each of three successive weeks, in a newspaper of general circulation
in the town where the land lies, the first publication to be not less than 21 days
before the day of sale.
§ 4964. RECORDING
The mortgagee shall record the notice of sale in the land records of the
town or city where the land lies not less than 60 days prior to the sale. The
filing of the notice of the sale shall be in lieu of filing a foreclosure complaint
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VT LEG 266061.1
under section 4932 of this title and shall be sufficient notice of the pendency of
the nonjudicial foreclosure by power of sale to all persons who acquire any
interest or lien in the mortgaged property between the dates of recording the
notice of sale and recording the foreclosure deed. Without further notice or
service, those persons shall be bound by the power of sale and the foreclosure
deed and shall be foreclosed from all rights or equity in the mortgaged
property.
§ 4965. SERVICE; FORM
(a)(1) In all cases, unless service is waived under subsection 4966(g) of
this title, a copy of the notice of sale shall be served on the mortgagor or his or
her representative in interest by:
(A) sending the notice by registered or certified mail addressed to the
mortgagor or such representative at his or her last known address, or to such
person and address as may be agreed upon in said mortgage, at least 60 days
before said sale; or
(B) serving the notice in any manner authorized by the Vermont
Rules of Civil Procedure.
(2) As used in this section, “mortgagor” shall mean the mortgagor or
the then record owner of the mortgaged property.
(b)(1) A copy of the notice of sale shall be sent to any tenant lawfully
occupying the mortgaged property and to any person having a recorded
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interest in the mortgaged property of record which will be foreclosed by the
sale, provided that the interest is recorded in the applicable land records prior
to the recording of the notice of sale. The notice required by this subsection
shall be sent not less than 60 days before the sale. Notice to a tenant shall be
sufficient if mailed to the tenant by first class mail at the address specified in
the lease, if recorded, or to the occupant at the address of the mortgaged
property, if the lease is not recorded.
(2) Compliance with this subsection shall be sufficient with respect to
persons entitled to receive notice under subdivision (1) of this subsection, and
the failure to give additional notice shall not be grounds to invalidate the sale.
Any mortgagor or junior lienholder who refuses to accept or claim mailed or
served notice or who frustrates attempts by the mortgagee to give notice of the
sale by failing to give or leave a forwarding address or by other acts or
omissions shall be deemed to be notified of the sale, provided that such
mortgagee shall have made a good faith effort to provide such notice.
(c)(1) The following notice of sale form may be used and may be altered as
circumstances require:
By virtue and in execution of the Power of Sale contained in a certain
mortgage given by __________ to __________ dated __________ and
recorded in Volume __________ Page __________ of the land records of the
town of __________, of which mortgage the undersigned is the present holder,
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(if by assignment, or in any fiduciary capacity, give reference) for breach of
the conditions of said mortgage and for the purpose of foreclosing the same
will be sold at Public Auction at __________ o’clock, ___ M. on the
__________ day of __________ 20____, (place) __________ at the
mortgaged property.
To wit: (Legal description of the mortgaged property and in case of partial
releases, state exceptions.)
Terms of sale: (State here the amount, if any, to be paid in cash by the
purchaser at the time of the sale, and the schedule for payment of the balance.)
The mortgagor and all junior lienholders are entitled to redeem the mortgaged
property at any time prior to the sale by paying the full amount due under the
mortgage, including the costs and expenses of the sale.
Other terms to be announced at the sale or inquire at __________
(Signed) _________________________________
Mortgagee (may be signed by mortgagee’s attorney)
__________ 20__
(2) This subsection shall not be construed to prevent the use of other
forms. A notice of sale shall be sufficient if it fully sets forth the date, time, and
place of sale; the town, county, street or highway and street number, if any, of
the mortgaged premises; the date of the mortgage; the volume and page of the
recording of the mortgage; the terms of the sale; the statement language
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required by subdivision (d)(1) of this section; and notice of the right to redeem.
(d)(1) The notice of the sale shall include the following statement: “The
mortgagor and all junior lienholders are hereby notified that at any time
before the foreclosure sale, the mortgagor and all junior lienholders have a
right to petition the civil division of the superior court for the county in which
the mortgaged property is situated, with service upon the mortgagee, and upon
such bond as the court may require, to enjoin the scheduled foreclosure sale.
Failure to institute such petition and complete service upon the foreclosing
party, or the party’s agent, conducting the sale prior to sale shall thereafter
bar any action or right of action of the mortgagor or any junior lienholder
based on the validity of the foreclosure, the right of the mortgagee to conduct
the foreclosure sale, or compliance by the mortgagee with the notice
requirements and other conditions of this section. An action to recover
damages resulting from the sale of the mortgaged property on the date of the
sale may be commenced at any time within one year following the date of the
sale, but not thereafter.”
(2) The mortgagor and all junior lienholders shall have the rights
contained in the notice provided for in this subsection.
§ 4966. CONDUCT AND LOCATION OF SALE
(a) The sale shall be held at the mortgaged property except that it may be
held elsewhere if agreed to in writing by the mortgagor and the mortgagee not
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less than 60 days nor more than 90 days before the sale. At the sale, the
mortgaged property shall be sold to the highest bidder in conformance with the
terms of sale set forth in the foreclosure notice.
(b) The mortgagor shall be entitled to redeem the mortgaged property at
any time prior to the sale by paying to the mortgagee the full amount due
under the mortgage, including the costs and expenses of the sale.
(c) The public sale may be adjourned one or more times for a total time not
exceeding 60 days by announcement of the new sale date to those present at
each adjournment or by posting notice of the adjournment in a conspicuous
place at the location of the sale. Written notice of the new sale date shall also
be given by first class mail, postage prepaid, to any person who received
notice of the sale pursuant to section 4965 of this title.
(d) Any person may bid at the sale. All bidders, except for the mortgagee
plaintiff or designee, shall meet the requirements set forth in the notice of sale
in order to bid at the sale.
(e) In the event that the proceeds of sale, after first deducting the
reasonable expenses incurred in making the sale, exceed the amounts due to
the mortgagee at the time of sale, the surplus shall be paid to other lien
holders of record in the order of the priority of their liens. In the event that the
proceeds of sale exceed the amount due to the mortgagee and the amounts due
to the other lien holders, the excess shall be paid to the mortgagor. The
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mortgagee or person conducting the sale may interplead any sale proceeds in
excess of the indebtedness and expenses secured by the mortgage in the event
there are any liens of record against the real estate.
(f) This section shall not preclude the mortgagee from maintaining a
subsequent action against the mortgagor for any deficiency.
(g) Any party entitled to be sent notice under this section may, either before
or after the foreclosure sale, waive the party’s right to receive notice, in which
case no foreclosure sale shall be invalid or ineffectual to foreclose that party’s
rights under the mortgage. A waiver of notice authorized or validated under
this section shall be recorded in the land records in the town or city where the
property is located.
§ 4967. RECORDING FOLLOWING SALE
(a) Within 90 days after the sale, the mortgagee selling pursuant to the
power shall cause the foreclosure deed and an accompanying affidavit to be
recorded in the land records of the town where the property is situated. The
affidavit setting forth fully and particularly the mortgagee’s acts with respect
to the sale of the mortgaged property, including the dates that notices of the
sale were published, shall set forth facts showing that no person in interest is
in the military service as defined in the Service Members Civil Relief Act of
2003. The affidavit or a duly certified copy thereof shall be admissible in
evidence on the issue of whether the power of sale was duly executed.
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(b) If the recording required by this section is prevented by an order or
stay of any court, the time for such recording shall be extended until 10 days
after the expiration or removal of such order or stay.
(c) If the recording required by this section is made more than 60 days
after the sale, the affidavit shall state why the recording was not made earlier.
(d) Failure to record the deed and affidavit within the statutory period
required by this subsection shall render the sale void and of no effect only as
to liens or other encumbrances of record intervening between the day of the
sale and the time of recording of said deed and affidavit.
(e) Correction of error. In case of an alleged error or omission in the
affidavit, the court, on petition and after notice to interested parties, may
validate the affidavit or authorize the recording of an affidavit amending,
correcting or in substitution for an affidavit so recorded, and the affidavit so
authorized to be recorded or a certified copy of the record thereof shall have
the same effect and shall be admitted in evidence as if it had been recorded
within the 90-day period required by this section.
§ 4968. TRANSFER OF TITLE
Title to the foreclosed mortgaged property under this section shall not pass
to the purchaser until the time of the recording of the deed and affidavit. Upon
such recording, title to the mortgaged property shall pass to the purchaser free
and clear of all interests and encumbrances which do not have priority over
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such mortgage.
§ 4969. FAILURE OF SALE; RESALE
If the purchaser does not pay the balance of the purchase price according
to the terms of the sale, and at the option of the mortgagee, the down payment,
if any, shall be forfeited and the foreclosure sale shall be void.
§ 4970. FORM AND EFFECT OF FORECLOSURE DEED
(a) The foreclosure deed shall be in substantially the following form:
__________ of __________ County, __________ State of __________, holder
of a mortgage from __________ to __________ dated __________, recorded
in __________ Book___ at Page___ of the Town of ____ Land Records, by the
power conferred by said mortgage and every other power, for___ dollars paid,
grant to __________, (complete mailing address) __________, of
__________Street, Town (City) of __________, __________ County, State of
__________, the premises conveyed by said mortgage.
(Here add acknowledgment)
(b) A deed substantially in the form set forth in subsection (a) of this
section shall, when duly executed and delivered, have the force and effect of a
deed in fee simple to the grantee, heirs, successors and assigns, to their own
use, with covenants on the part of the mortgagee, for himself or herself, that, at
the time of the delivery of such deed, the mortgagee was duly authorized to
make sale of the mortgaged property; that in all of the mortgagee’s
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VT LEG 266061.1
proceedings in the sale thereof, the mortgagee has complied with the
requirements of this subchapter; and that the mortgagee will warrant and
defend the same to the grantee, heirs, successors, and assigns against the
lawful claims of all persons claiming by, from, or under him or her.
Sec. 2. REPEAL
12 V.S.A. chapter 163, subchapter 6 (foreclosure of mortgages) is repealed.
Sec. 3. EFFECTIVE DATE; APPLICABILITY
This act shall take effect on July 1, 2012 and shall apply to any mortgage
foreclosure proceeding instituted after that date.
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