Foreclosure by Judicial Sale

V.S.A. tit. 12, ch. 172, subch. 3

in effect

12 V.S.A. § 4945 Judicial sale foreclosure

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 the premises are not redeemed, and for the time, manner, and notice of sale, if required, and the application of the proceeds therefrom. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4946 Procedure

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 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. (c) Time for redemption; other property. If a decree is made foreclosing the right of redemption by judicial sale with respect to any property other than farmland or a dwelling house that is occupied by the owner as his or her principal residence at the time the plaintiff applies for entry of judgment, the redemption period shall be eliminated or reduced by the court to no more than 30 days. (d) Writ of possession. Upon expiration of the period of redemption in the decree, other than farmland or a dwelling house when currently occupied by the owner as his or her principal residence, if the mortgagor or the mortgagor’s successors, heirs, or assigns have not redeemed the mortgage, any remaining rights of the mortgagor to possession shall terminate, and the clerk of the court shall issue a writ of possession at the plaintiff’s request and upon court approval. In the case of farmland or a dwelling house currently occupied by the owner as his or her principal residence when the period of redemption in the decree expires, the clerk shall issue a writ of possession at the plaintiff’s request and upon approval of the court. Such writ shall have the same force and effect and be executed in the same manner as similar writs issued after judgment by a court of law in ejectment proceedings. Where the mortgaged property is occupied by a residential tenant, the writ shall be served on the tenant, and the plaintiff shall be placed in possession of the mortgaged property without further proceedings no sooner than 30 days after the writ is served, or upon such other time as is required by federal law, whichever is longer. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4947 Foreclosure of equity of redemption; recording

4947. Foreclosure of equity of redemption; recording (a) In an action for foreclosure under this subchapter where the time of redemption has expired, the party obtaining the foreclosure shall cause a certified copy of the judgment and the certificate of nonredemption to be recorded in the office where by law a deed of the lands is required to be recorded. (b) If the plaintiff complies with subsection (a) of this section, the expiration of the right of redemption under the decree shall foreclose the interest of subsequent purchasers, mortgagees, or attaching creditors whose interest in the property being foreclosed first arose after the filing of the complaint for foreclosure in the land records as provided in section 4932 of this chapter. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4948 Reinstatement of mortgage prior to sale

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 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. 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 _____ 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 Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4949 Mortgagor’s redemption prior to judicial sale

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. (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. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4950 [Reserved.]

12 V.S.A. § 4951 Judgment vacated

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 any other provision of law, this section will apply retroactively and apply to orders to vacate in existence on July 1, 2012. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4952 Sale procedures

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 not 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 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 ______ and recorded in Volume ____ 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.) 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__ . Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4953 Conduct and location of sale

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 known address at least five days before the new sale date. The public sale may be adjourned for a period of time in excess 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. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4954 Procedure following 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. (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. Added 2011, No. 102 (Adj. Sess.), § 1.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/12/172Fetched: 10/21/2026