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Foreclosure in Vermont

In Vermont, a lender has to go to court to foreclose on a home owned by a person, and if you live there you can ask for mediation. Here's each step, from the state's statutes and court pages.

Type: Judicial

Last checked October 26, 2026. Sources are listed at the bottom of this page.

Type
Judicial. Foreclosure cases are heard in the Civil Division of the Superior Court. A lender can't foreclose without a court case on a home owned by a person.
FHA time frame
HUD's time frame for FHA loans: 24 months from the first legal action to clear title and possession.
Redemption
For a home you live in, six months from the judgment, unless the court orders a shorter time.
Mediation
For owner-occupied homes of up to four units. Ask before four months after judgment and before the redemption period ends.

How a Vermont foreclosure works, step by step

  1. Generally, the legal foreclosure process can't start until you're at least 120 days behind.
  2. The lender files a lawsuit in the Civil Division of the Superior Court for the county where the home is. It also files a copy of the complaint in the town clerk's office in each town where the property sits.
  3. Along with the summons and complaint, the lender must give you two copies of a notice about mediation. If you've been served, fill out the court's Verified Answer form for foreclosure cases and file it with the court. If you don't file an Answer by the deadline, the court may enter a default judgment and you lose the case.
  4. The court can enter a judgment that forecloses without a sale, called strict foreclosure, unless the lender asks for a sale or the court orders one. Any party can ask in writing for a court sale, and the court can order one on its own.
  5. For a home you live in, the court sets a redemption period of six months from the judgment, unless it orders a shorter time. A home you live in can't be sold within seven months after you were served with the complaint, unless the court shortens the time or you and the lender agree.
  6. If you don't redeem in time, the clerk issues a writ of possession at the lender's request. In a sale case involving the home you live in, the court must approve the writ.
  7. In a sale case, a notice of the sale runs in a local newspaper once a week for three weeks in a row, starting at least 21 days before the sale. The notice gives the date, time and place, and it's mailed after the redemption period ends but at least 30 days before the sale.
  8. The sale is held at the home itself unless the court picks another place, and the highest bidder wins.
  9. After the sale, the lender files a sworn report with an accounting of the money and asks the court to confirm the sale. Once the confirmation order is recorded in the town land records, title passes to the buyer.

Mediation: the program you have to ask for

Vermont's foreclosure mediation rules cover foreclosures on homes of four units or less where the owner lives, with some exceptions. You must send the court a written form to ask for it. If you ask before four months after judgment and before the redemption period ends, the court must send the case to mediation, though it can refuse in some cases.

  • The mediator's job is to make sure the lender has considered every option for changing the loan so you can stay in your home.
  • The lender has to use and consider tools such as reinstatement, loan modification, forbearance and short sale.
  • The lender pays the required mediation costs, but you pay your own costs, such as your own lawyer and travel.
  • If a party doesn't follow the rules, the court can sanction them, including by barring the lender from selling or taking the home.
  • Mediation doesn't pause the redemption period. It has to be finished before that period ends and within 120 days after the mediator is appointed, unless both sides agree or the court orders otherwise.

The state's banking regulator says that if mediation is offered, respond as quickly as you can. Send in the form early and bring your numbers to every session.

Paying off, catching up or undoing the judgment

You can redeem the home any time before the public sale by paying the full amount in the judgment, plus sale costs and other charges the court orders or you and the lender agree on. If the lender agrees, you can redeem for less than the full judgment amount.

Even after the redemption period ends, you and the lender can agree to reinstate or modify the loan before the sale. You and the lender can also jointly ask the court to vacate the judgment at any time before the sale.

Your servicer can't help if it doesn't know you're having trouble, Vermont's housing finance agency says. So call early, keep notes, and get any deal in writing.

Strict foreclosure or a sale at the home

In a strict foreclosure there's no sale: if you don't redeem, the clerk issues a writ of possession to the lender. But the court can't order strict foreclosure unless it finds there's no substantial value in the property beyond the mortgage debt, other liens and unpaid property taxes.

If there's a sale, it's held at the home unless the court sets another place. Anyone can bid, and every bidder except the lender must meet the terms in the notice of sale.

If you have equity in the home, that test matters. Selling on your own before the redemption period ends may leave you more than a forced sale would.

How long it takes

Foreclosure generally can't legally start until you're at least 120 days behind. Once it starts, how long you have until the sale depends on your state.

For FHA loans, HUD's time frame runs from the first legal action until the lender has clear title to the home and possession of it. In Vermont, that's 24 months, and the first legal action is the court complaint.

For a home you live in, the redemption period is six months from the judgment unless the court shortens it. No sale can happen within seven months after you were served, unless the court shortens the time or you and the lender agree. If there's a sale, the newspaper notice starts at least 21 days before it.

These are official markers, not a forecast. Your case can move faster or slower, so don't count on extra time.

Deficiency, surplus and redemption

If a sale doesn't bring in enough to cover the sale costs and what you owe, the court may enter a judgment against you for the shortfall, called a deficiency. The lender must ask for it before the court confirms the sale. If it doesn't ask, it gives up the deficiency.

If the sale brings in more than the lender is owed, the extra pays other lienholders in order of priority, and anything left after that goes to you. If there's a surplus, the lender can take its full mediation costs out of it.

Your right to redeem runs until the public sale, or until the redemption period in a strict foreclosure ends. Once the confirmation order is recorded, title passes to the buyer.

Protections when you sell, lease or get offers

  • Vermont treats anyone who, for someone else and for a fee or other pay, makes a practice of selling, buying or negotiating the sale of real estate, or dealing in options on it, as a real estate broker. Acting as a broker in Vermont without a license is against the law.
  • Vermont also licenses debt adjusters, a term that includes acting as a go-between with your creditors to get concessions.
  • Under federal rules, companies that offer mortgage or foreclosure help can't charge any fee until they've worked out a deal with your lender that you want to accept.
  • Vermont's banking regulator warns about rescue offers that ask for large upfront fees or ask you to sign over the deed to your home.
  • Federal law makes it a crime, with intent to defraud, to make a practice of buying homes with FHA or VA loans that are behind, skipping the loan payments and using the rent for the buyer's own use.

Two of these touch how I buy. The broker license rule can reach a novation, where your house is marketed for sale while you're still on title, so ask who's marketing it and whether they're licensed. The deed warning and the federal law both bear on taking over payments, because you'd sign the deed over while the loan stays in your name, so get the payment terms in writing. I never charge you anything. And don't stop talking to your lender while you weigh any offer, including mine.

Free help in Vermont

Sources

Last checked October 26, 2026. Every fact on this page comes from one of these official sources.

  1. 12 V.S.A. § 4932 (legislature.vermont.gov)
  2. 12 V.S.A. § 4961 (legislature.vermont.gov)
  3. HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (PDF) (hud.gov)
  4. 12 V.S.A. § 4941 (legislature.vermont.gov)
  5. 12 V.S.A. § 4946 (legislature.vermont.gov)
  6. 12 V.S.A. § 4631 (legislature.vermont.gov)
  7. 12 V.S.A. § 4632 (legislature.vermont.gov)
  8. CFPB: How long will it take before I’ll face foreclosure if I can’t make my mortgage payments? What is the foreclosure timeline? (consumerfinance.gov)
  9. Vermont Judiciary: eviction and foreclosure (vtcourts.gov)
  10. Vermont Judiciary: Verified Answer, foreclosure case (form 100-00034) (PDF) (vtcourts.gov)
  11. 12 V.S.A. § 4952 (legislature.vermont.gov)
  12. 12 V.S.A. § 4953 (legislature.vermont.gov)
  13. 12 V.S.A. § 4954 (legislature.vermont.gov)
  14. Vermont Judiciary: civil mediation (vtcourts.gov)
  15. 12 V.S.A. § 4633 (legislature.vermont.gov)
  16. 12 V.S.A. § 4637 (legislature.vermont.gov)
  17. 12 V.S.A. § 4635 (legislature.vermont.gov)
  18. Vermont Department of Financial Regulation: mortgage payment challenges (PDF) (dfr.vermont.gov)
  19. 12 V.S.A. § 4949 (legislature.vermont.gov)
  20. 12 V.S.A. § 4948 (legislature.vermont.gov)
  21. 12 V.S.A. § 4951 (legislature.vermont.gov)
  22. Vermont Housing Finance Agency: homeowners (vhfa.org)
  23. 26 V.S.A. § 2211 (legislature.vermont.gov)
  24. 26 V.S.A. § 2212 (legislature.vermont.gov)
  25. 8 V.S.A. § 2751 (legislature.vermont.gov)
  26. 8 V.S.A. § 2752 (legislature.vermont.gov)
  27. CFPB: How to spot and avoid foreclosure relief scams (consumerfinance.gov)
  28. 12 U.S.C. 1709-2: Equity skimming (GovInfo) (govinfo.gov)

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