Mortgage Laws
In Vermont the law of mortgages is mainly governed by state statutory through
Vermont Statutes 461.-464.
- Lenders may foreclose on mortgages or deeds of trust in default using the
strict or the power of sale foreclosure process.
- The strict foreclosure process is based on the premise that the lender
owns the property until the mortgage has been paid in full. If the borrower
breaks any of the conditions established in the mortgage prior to the time
the loan is paid in full, he or she will lose any right to the property and
the lender will either take possession of the property or arrange for it's
sale.
- Regardless, the borrower has either a six (6) month (post-1968 mortgages)
or a twelve (12) month (pre-1968 mortgages) redemption period.
- In Vermont, power of sale foreclosures are conducted either judicially
or non-judicially, depending on the type of property securing the deed of
trust or mortgage.
- In Vermont, lenders who wish to obtain a foreclosure using the power of
sale clause in the deed of trust must first file a complaint in a court having
jurisdiction in the county where the property is located and try and obtain
a decree of sale.
- Vermont law requires that a defective mortgage be treated as if it had
never been recorded.
- In addition to any statutory damages ($25.00 per day after the expiration
of the 30 days following full pay-off, up to an aggregate maximum of $5,000.00),
the mortgagee shall also be liable for consequential damages, punitive damages,
court costs and reasonable attorney's fees to any aggrieved party who substantially
prevails in an action .
