vermont bar association materials... · v.r.c.p. 80.1 (k) and shall order distribution of sale...

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.]


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


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.


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


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


)

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


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.



[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


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


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.



including that date or Saturdays, Sundays, or legal holidays.



___________________________

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.



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).



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


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);


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.]


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


)

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.].


___________________________

Hon.

Presiding Judge

BILL AS PASSED THE HOUSE H.4032011 Page 1 of 66

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


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


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


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


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


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


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


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


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


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


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


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


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


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





§ 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


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


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


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


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


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


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


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


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


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


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


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


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



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


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



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


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


mortgage, including the costs and expenses of the sale.15


(Signed) _________________________________17


__________ 20__19


forms. A notice of sale shall be sufficient if it fully sets forth the date, time,21


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


VT LEG 266061.1


(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


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


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


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


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.


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


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


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


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.


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


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


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


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


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


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.


VT LEG 266061.1

(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


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


mortgaged property without further proceedings no sooner than 30 days after


VT LEG 266061.1

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




recorded.

(b) If the plaintiff complies with subsection (a) of this section, the





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


VT LEG 266061.1

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.


VT LEG 266061.1

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 _____________


VT LEG 266061.1

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.


VT LEG 266061.1

(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


VT LEG 266061.1

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


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.)


VT LEG 266061.1

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


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.


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.


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;


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


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


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


§ 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


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


VT LEG 266061.1

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:


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,


VT LEG 266061.1

(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.)


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




(Signed) _________________________________


__________ 20__


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


VT LEG 266061.1

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.


(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


VT LEG 266061.1

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


VT LEG 266061.1

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.


VT LEG 266061.1

(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


VT LEG 266061.1

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


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


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


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


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


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


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


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


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


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


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


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


application of any proceeds.7

(g) In an action for foreclosure under this section, where the time of8





(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


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


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


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


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


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





§ 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


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


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


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


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


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


(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


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


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


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


VT LEG 266061.1


Signed: ____________________________2


Dated: ________________________________, 20____.4


(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


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


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


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


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


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


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


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
