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Facing Foreclosure in Vermont?

You have more time and more options than you think. Vermont uses judicial (12 v.s.a. § 4531 et seq.) foreclosure with a typical timeline of 360 days. You also get a 6 months redemption period after the sale. This guide explains what's happening and what to do.

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Vermont Foreclosure Facts

Foreclosure Type
Judicial (12 V.S.A. § 4531 et seq.)
Typical Timeline
360 Days
From first notice to sale
Redemption Period
6 months
You can buy back after sale
Deficiency Judgment
Limited
Restrictions apply
Right to Cure
Until Sale
Pay arrears to stop process
Mandatory Mediation
Required
Vermont Foreclosure Mediation Program

Vermont ranks 49th in the nation for financial distress, with a State Distress Index score of 34.5 (Healthy). The state's bankruptcy filing rate is 44 per 100,000 residents. Credit card delinquency stands at 8.99%. If you're struggling, you're not alone.

Source: Vermont Financial Distress Profile — American Default Research, updated 2026-04-16

Most Distressed Counties

County Score Zone
Rutland County 43.3 Normal
Bennington County 43.0 Normal
Orleans County 40.9 Normal
Caledonia County 39.6 Normal
Windham County 37.0 Normal

All 14 counties in Normal or Healthy zones.

See all 14 Vermont counties →

Vermont Foreclosure Timeline

Vermont's judicial process gives you more time than most states. Federal law protects you for the first 120 days, and Vermont's 6 months redemption period extends the full process further.

Day 1–36
Missed payment. Your servicer must attempt to contact you by Day 36 to discuss options. Federal law (Regulation X).
Day 37–45
Written notice required. Your servicer must send written notice of loss mitigation options by Day 45. You can still apply for help.
Day 45–120
Protected period. Federal law prohibits your lender from starting foreclosure until Day 120. This is your window to apply for a loan modification or forbearance.
Day 120+
Foreclosure can begin. If you've received a Notice of Default, you're here. In Vermont, the lender must give you 30 days' written notice and follow state-specific publication requirements. You still have options — see what you can do.
Day 150–300
Foreclosure sale. The property is sold at public auction, typically at the county courthouse. The lender often buys it back.
After sale
6 months redemption. Vermont law gives you time after the sale to buy back the property. The specific terms depend on your situation — contact a HUD counselor or attorney for details on your redemption rights.

For a personalized timeline based on your last payment date, use our Foreclosure Timeline Calculator.

Your Rights Under Vermont Law

Right to Cure Before the foreclosure complaint is filed (during the 30-day notice period) and up to the time the court enters a decree of foreclosure. You can cure the default by paying all past-due amounts, late charges, and costs. 27 V.S.A. § 3604; 12 V.S.A. § 4528; 12 CFR 1024.41
Right to Reinstate Before the court enters a decree of foreclosure. Contact your servicer for the exact reinstatement amount. 27 V.S.A. § 3604; 12 V.S.A. § 4531
Dual Tracking Prohibition Vermont's Homeowner Protections Act (27 V.S.A. § 3601 et seq.) includes protections that effectively prohibit dual tracking by requiring loss mitigation review before foreclosure. 27 V.S.A. § 3604; 12 CFR 1024.41
Loss Mitigation Review Both Vermont state law (27 V.S.A. § 3604) and federal CFPB Regulation X require servicers to review borrowers for loss mitigation options before foreclosure. 27 V.S.A. § 3604; 12 CFR 1024.41
Pre-Foreclosure Contact Both Vermont state law (27 V.S.A. § 3604 — 30-day notice with loss mitigation information and mediation right) and federal CFPB rules require pre-foreclosure contact and outreach. 27 V.S.A. § 3604; 12 CFR 1024.41

Mediation & Dispute Resolution in Vermont

Vermont Foreclosure Mediation Program

Vermont's Foreclosure Mediation Program is a significant borrower protection. It is not automatic — you must request it after receiving the 30-day notice. If you request mediation, the foreclosure is paused until mediation concludes.

Applies to: Owner-occupied residential properties (1-4 units). Borrower must request mediation after receiving the 30-day pre-foreclosure notice.

Program details
27 V.S.A. § 3604; Vermont Supreme Court Administrative Order No. 51

Your Options in Vermont

Every situation is different, but most Vermont homeowners have more options than they realize. Here are the paths available to you, from keeping your home to making a clean exit.

Can I keep my home?

Yes, if you act early enough. A loan modification permanently changes your mortgage terms to make payments affordable. Your servicer is required to evaluate you for one if you submit a complete application more than 37 days before a scheduled sale.

Forbearance gives you a temporary payment pause. It doesn't erase what you owe, but it buys time if your hardship is short-term. In Vermont, forbearance available through servicer and federal programs (Fannie/Freddie/FHA/VA/USDA). Contact your servicer or a HUD-approved counselor. Reinstatement means paying everything you owe (missed payments plus fees) to bring the loan current.

Filing for Chapter 13 bankruptcy triggers an automatic stay that halts foreclosure immediately. You can catch up on missed payments over 3-5 years while keeping your home. The bankruptcy filing rate in Vermont is 44 per 100,000 residents.

Vermont also requires mediation through the Vermont Foreclosure Mediation Program before your lender can proceed with foreclosure.

What if I can't keep my home?

Selling before foreclosure gives you control over the process and protects your credit score. A short sale lets you sell for less than you owe with lender approval. A deed in lieu of foreclosure transfers the property directly to the lender.

If you sell through a short sale in Vermont, you can negotiate a deficiency waiver as part of the approval. Short sales require servicer approval.

A deed in lieu of foreclosure in Vermont transfers the property directly to the lender. Deed in lieu available with servicer approval and clear title.

Vermont limits deficiency judgments — your lender's ability to pursue you for the balance is restricted by state law.

A distressed property specialist can help

An agent who works with distressed sellers in Vermont can negotiate with your lender, manage the short sale process, and help you walk away with your credit intact. The earlier you start, the more leverage you have.

Talk to one for free

My sale date is within 30 days

You still have options, but you need to move fast.

File for bankruptcy. A Chapter 13 filing triggers an automatic stay that stops the sale immediately. Talk to a bankruptcy attorney today.

Submit a loss mitigation application. If you haven't already, a complete application received more than 37 days before the sale forces your servicer to review it before proceeding.

Call a HUD counselor now. They can contact your servicer on your behalf and may be able to delay the sale. Call 1-800-569-4287.

Request mediation. Vermont's Vermont Foreclosure Mediation Program can give you additional time. Learn more.

Financial Assistance in Vermont

Vermont HAF / Vermont Homeowner Assistance Fund

Limited Funds
Administered by Vermont Housing Finance Agency (VHFA)
Apply Visit program website

Funds are limited and may run out. Apply as soon as possible or contact Vermont Housing Finance Agency (VHFA) to check availability.

Other Vermont Programs

Vermont Housing Finance Agency (VHFA)

State housing finance authority providing homeownership programs, down payment assistance, mortgage assistance, and counseling referrals. Administers HAF and other homeownership preservation programs.

Visit website

Vermont HUD-Approved Housing Counseling

Free foreclosure prevention counseling through HUD-approved agencies; services include loss mitigation assistance, mediation preparation, servicer negotiation support, budget counseling, and legal referrals.

Visit website

Vermont Legal Aid

Free civil legal services for low-income Vermont residents, including housing and foreclosure defense. Statewide coverage with offices in Burlington, Montpelier, Rutland, St.

Visit website

Champlain Valley Office of Economic Opportunity (CVOEO)

HUD-approved housing counseling agency providing foreclosure prevention counseling, budgeting, and mediation support in northwestern Vermont.

Visit website

Vermont 2-1-1

Statewide referral service connecting residents to housing assistance, utility assistance, food assistance, and other social services; dial 2-1-1 for referrals

Visit website

After the Sale in Vermont

Eviction Notice
90 Days (Federal)
Court order required for removal
Surplus Funds
You can claim
Surplus proceeds from the foreclosure sale (above the debt and costs) belong to the former owner after junior lienholders are paid in priority order.
Cash for Keys
Commonly offered
Voluntary relocation assistance sometimes offered by purchasers.

After the 6-month redemption period expires, the purchaser may seek a writ of possession to remove the former owner. Vermont's eviction process (9 V.S.A. The federal Protecting Tenants at Foreclosure Act (PTFA) requires at least 90 days' notice for bona fide tenants in any state.

Protect yourself from scams

People in financial distress are prime targets for fraud. Know these rules:

⚠
Never pay an upfront fee for help. Advance fees for mortgage or debt assistance are illegal in most states. If anyone asks for money before doing anything, walk away.
⚠
HUD-approved counseling is always free. Call 1-800-569-4287 or visit the CFPB counselor finder. If someone charges for what HUD counselors do for free, it's a scam.
⚠
Never sign over your deed without an attorney. "Equity stripping" and "sale-leaseback" scams trick homeowners into transferring their title. You could lose your home permanently.
⚠
Your servicer must evaluate you for loss mitigation. Under federal rules (Regulation X), servicers cannot start foreclosure until you're 120+ days delinquent, and must review your application before proceeding. If a company claims only they can "save" your home, verify through your actual servicer.

Report fraud: CFPB · FTC · your state attorney general's office.

How It Works

1
Tell us your situation

Answer a few questions about where you are in the process. Takes 60 seconds.

2
We review your options

A local professional reviews your situation based on Vermont law and your servicer's track record.

3
You get a plan

You receive a personalized action plan with next steps. No upfront fees. No obligation.

Foreclosure Timeline Calculator

See exactly when each step of Vermont's foreclosure process happens based on your last payment date.

Hardship Letter Generator

Write a loss mitigation request to your mortgage servicer. Pre-formatted with your situation details.

Get a Free, Confidential Review of Your Options in Vermont

A HUD counselor, attorney, or distressed property specialist in Vermont can review your specific situation. Many at no cost.

We never charge upfront fees. We never sell your information.

Thank you. A local professional will review your situation and be in touch. In the meantime, visit our free directory to find HUD-approved counselors and legal aid in Vermont.

We connect you with HUD-approved counselors, legal aid, and distressed property specialists. We do not sell your information.

Free Resources in Vermont

HUD-Approved Counselors

8 certified agencies in Vermont provide free foreclosure prevention counseling. They can negotiate with your servicer on your behalf.

Find a counselor near you

Legal Aid

Vermont Legal Aid provides free legal help to low-income residents facing foreclosure, eviction, and debt collection.

Find legal aid

Vermont Bar Association Lawyer Referral Service

The Vermont Bar Association Lawyer Referral Service can connect you with a foreclosure defense attorney. Initial consultations are often free or low-cost.

Find an attorney

Vermont Foreclosure Law

Detailed guide to Vermont's foreclosure statutes, homeowner protections, and redemption rights. Every claim cited to its source statute.

Read Vermont foreclosure law

File a Complaint

File a complaint about your mortgage servicer with the Consumer Financial Protection Bureau.

CFPB complaint portal

Frequently Asked Questions

How long does foreclosure take in Vermont?

Vermont uses judicial (12 v.s.a. § 4531 et seq.) foreclosure. The process typically takes 360 days from the first notice to the sale date. Vermont also grants a 6 months redemption period after the sale, extending the full timeline. Federal law (Regulation X) prohibits lenders from starting foreclosure until Day 120 of delinquency.

Can I stop foreclosure once it starts in Vermont?

Yes. You have several options: (1) Reinstatement — pay all missed payments plus fees to bring your loan current. (2) Loan modification — your servicer must review a complete application received more than 37 days before a scheduled sale. (3) Forbearance — temporary payment pause. (4) Bankruptcy — triggers an automatic stay that halts the sale immediately. (5) Short sale — sell the property before the lender does.

Does Vermont require mediation before foreclosure?

Yes. Vermont offers the Vermont Foreclosure Mediation Program, which can be requested by the homeowner. Mediation gives you a chance to negotiate directly with your lender under the supervision of a neutral third party. This can result in loan modifications, payment plans, or other alternatives to foreclosure.

Does Vermont allow deficiency judgments?

Vermont limits deficiency judgments. Your lender's ability to pursue you for the remaining balance is restricted by state law. Requirements may include fair market value credits or time limitations. See our Vermont foreclosure law guide for specific details.

Is foreclosure counseling free in Vermont?

Yes. There are 8 HUD-approved counseling agencies in Vermont. Call 1-800-569-4287 for a free referral. HUD counselors can negotiate with your servicer on your behalf at no cost to you. Find one near you.

What is the homestead exemption in Vermont?

Vermont's homestead exemption is $125,000. Important: this exemption does not protect your home from mortgage foreclosure. It only protects equity from unsecured creditors like credit card companies. It will not stop or slow a foreclosure.

What if I have an FHA, VA, or USDA loan in Vermont?

Government-backed loans have additional protections beyond Vermont state law. FHA loans require a face-to-face meeting attempt before foreclosure. VA loans require the servicer to explore all alternatives. USDA loans have their own loss mitigation process. These protections generally extend the timeline beyond the state minimums.

What happens to tenants if my Vermont home is foreclosed?

Federal law (the Protecting Tenants at Foreclosure Act) gives tenants with valid leases at least 90 days' notice before they must vacate after a foreclosure sale. Federal PTFA gives tenants with bona fide leases 90 days' notice after the sale. If you rent out the property, notify your tenants as soon as possible and advise them to document their lease.

Can I claim surplus funds after a foreclosure sale in Vermont?

Yes. If your Vermont home sells at auction for more than the total owed (including fees and costs), you have the right to claim the difference. Contact the county clerk, court, or trustee who conducted the sale. These funds can be significant — don't assume nothing is left.

Is the Homeowner Assistance Fund still available in Vermont?

Funds are limited. The Vermont HAF / Vermont Homeowner Assistance Fund is winding down and may close soon. Check current availability at the program website. Apply immediately if you need help — these funds are first-come, first-served.

Can I do a short sale to avoid foreclosure in Vermont?

Yes. In Vermont, you can negotiate a deficiency waiver as part of a short sale approval. Short sales require servicer approval. Get the waiver in writing before closing. A HUD-approved counselor can help negotiate the terms.

More Vermont Data

Vermont Distress Profile

State ADI score of 34.5 (Healthy), ranked 49th nationally. Debt, bankruptcy, safety net data.

Vermont Foreclosure Laws

Complete legal reference with governing statutes, process steps, and homeowner protections.

Vermont County Profiles

All 14 Vermont counties scored and ranked by the County Distress Index.

National Foreclosure Guide

Federal rights, step-by-step process, and help resources that apply in every state.
Last updated: 2026-04-16. Data sources: Federal Reserve Bank of New York, CFPB, U.S. Courts, Census Bureau, BLS, Vermont Code.

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