Vermont allows foreclosure either by filing a lawsuit to obtain strict foreclosure, in which the title given tot he lender by deed will be ruled to be final, or by filing a lawsuit to foreclosure under a power of sale clause in a deed of trust. Both procedures are governed by the Vermont Rules of Civil Procedure. There is a statute for deed of trust foreclosure (VT. Stat. Ann tit 12 §4531a). Under Vermont ’s strict foreclosure procedures, the lender gets a deed to the property at the outset of the loan, but the deed also provides that the borrower can get the title back by repaying the loan. All the lender has to do is get a court declaration that the borrower has failed to meet the condition, and the title becomes final in the name of the lender after a statutory redemption period passes, during which the borrower can recover the property by paying off the rest of the loan.
In strict foreclosure a complaint (lawsuit) must be filed in county court. The complaint and a summons to the borrows to appear and answer the complaint must be served on the borrower. The complaint must state the borrower's am lender's names, the date of the mortgage deed, a description of the debt owed and a claim for attorney's fees, if any are sought. It must state that the reason the lender is foreclosing, is a breach in the deed's conditions. Although the lawsuit prays for the court to foreclose the borrower's right to redeem the property, the borrower nevertheless has a right to re deem under Vermont 's statutes. Under Vermont statutes the time for redemption is one year for pre-1968 mortgage and six months for post-1968 mortgages, from the date of the judgment. However, the lender can request a shorter time for good cause. Once the complaint is served, the lender may move for summary judgment in order to avoid trial.
Due to Vermont 's long tradition of strict foreclosure, a foreclosure sale under a power of sale clause has only recently become common in residential loans, although they have been common in commercial transactions. Vermont does not have a well-established tradition of foreclosure auctions. In Vermont , a lender must still bring a lawsuit to foreclose a deed of trust and obtain an order for a sale. However, the foreclosure may not take place until seven months have passed from the date the lawsuit was served on the borrower, unless the borrower and lender agree otherwise, or the borrower is damaging the property.
In Vermont a lender may sue the borrower to collect deficiency if the foreclosure sale under the deed of trust was not sufficient to repay the loan plus the foreclosure expenses. However, if the lender buys at the foreclosure sale, the borrower can force the lender to credit the fair market value of the property against the total amount owed, which includes the loan balance and the foreclosure expenses. If the foreclosure sale generates a surplus, junior lien holders and creditors may claim it up to the amount owed in the order of their priority.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Either a judicial foreclosure in the form of a bill of equity, or a sale by advertisement pursuant to a power of sale clause in a deed of trust is permitted in Virginia .
In Virginia , a mortgage may be for closed by filing a type of lawsuit known as a bill in equity When and if necessary, a deed of trust could also be foreclosed through court action. In either case, a court order ca be issued which specifies the terms and conditions of the sale, which are controlled by the mortgage contract Commissioners are appointed to handle such sales. The court must confirm the sale.
The trustee under the deed of trust may accelerate the note, give the necessary preliminary notices, and arrange the fort closure sale.
The foreclosure sale ad must include anything required by the deed of trust and may include a legal description of the property, a street address and a tax map identification or general information about the property's location. The notice must include the time, place and terms of sale. It must give the name of the trustee and the address and phone number of a person who will be able to respond to inquiries about the foreclosure sale.
Even if the deed of trust provides for advertising, ads should be published no less once a day for three days, which may be consecutive days. If the deed of trust does not provide for advertising, then the ad shall be run once a week for four successive weeks. However, near a city, an ad on five different days, which may be consecutive, will be sufficient.
A copy of the advertisement or a notice with the same information must be mailed to the borrower at least 14 days before the foreclosure sale.
Time of Sale
The sale must be made no earlier than eight days after the first ad and no more than 30 days after the last advertisement.
Written one-price bids may be made and received by the trustee for entry by announcement at the foreclosure sale. Any bidder who attends the foreclosure may inspect the written bids.
The sale is to be made at auction to the highest bidder. Unless otherwise required by the deed of trust, the trustee may require a bidder to make a 10 percent cash deposit. The trustee must apply the proceeds of the sale first to expenses of the sale, including a 5 percent trustee's commission, second to unpaid taxes, assessments and levies, third to liens in order of their priority and the balance, if any, to the borrower. The trustee will execute and deliver a deed to the buyer.
A lender may pursue a borrower for a deficiency judgment in Virginia . No limits are imposed.
In a court-ordered foreclosure sale the court may give the borrower a redemption period. Otherwise, Virginia does not give borrowers redemption rights.