If you’ve missed three mortgage payments, a pre-foreclosure might be looming in your future. But before you get too stressed about the situation, you do have some alternatives to stop the foreclosure process. However, the sooner you can work something out with your lender, the better because having a foreclosure on your credit report can have negative consequences for years to come. So avoiding foreclosure in Vermont would be ideal. Below we’ll cover some last-minute strategies to stop foreclosure and your options to avoid foreclosure altogether.
How to Avoid a Foreclosure in Vermont
The Foreclosure Process in Vermont
The good news is that the foreclosure process in Vermont is lengthy. But don’t assume that you have plenty of time to figure out how to avoid foreclosure. You’ll want to know as much as you can about Vermont’s foreclosure process and the amount of time you have to stop foreclosure.
Something to understand if you don’t know much about Vermont’s foreclosure process is that the process will either be a “foreclosure by judicial sale” or a “strict foreclosure.”
Let’s take a look at each of these foreclosure processes in detail to understand what’s ahead.
Foreclosure by Judicial Sale
A “power of sale” clause is a clause noted in a deed of trust or mortgage that pre-authorizes the sale of the home to pay off the balance of the loan in the event of a default. In Vermont, lenders who obtain foreclosure using the power of sale clause must file a complaint in court in the county the property is located to try to get a decree of sale. The property sale must not be held until seven (7) months after the order of sale has been issued. Is there a way to stay in your home after foreclosure in Burlington? Click here to find out.
Vermont’s strict foreclosure process is based on the premise that the lender owns the residence until the mortgage is paid in full. If the loan holder breaks any of the conditions established in the mortgage terms prior to the time the home loan is paid in full, then he/she will lose any right to the house, and the lender will either take possession of the residence or arrange for its sale. However, in Vermont, a suit must be filed in the county where the home is located before any actions can occur. The borrower must be served a summons to appear before the court and informed of his/her rights, at which time the lender may move for a summary judgment and avoid trial altogether.
Regardless, the borrower has either a six-month (post-1968 mortgages) or a twelve-month (pre-1968 mortgages) redemption period.
Foreclosure Laws in Vermont
Now that we’ve got all the legal foreclosure process stuff out of the way, you’ll want to know what the foreclosure laws in Vermont are. No matter what, under the federal mortgage servicing laws, loan servicers must work with borrowers who are behind on their monthly mortgage payments to help them to avoid foreclosure. The process of working out a way to prevent a foreclosure is called” loss mitigation.”
Among other requirements, federal law also requires the servicer to establish- or make a good faith effort to establish- live contact with a borrower who is behind on payments no later than thirty-six (36) days after the missed payment and again within thirty-six (36) days after each following missed payment. The loan servicer also has to inform the borrower about various loss mitigation options available, like a loan modification, deed in lieu of foreclosure, or short sale.
Tips To Avoid Foreclosure in Vermont
The best way to deal with foreclosure is to avoid it at all costs. Below are some tips for avoiding foreclosure that you may want to use to stop foreclosure in its tracks.
Selling Your House After Foreclosure Begins
Honestly, a great solution to avoid foreclosure is to sell your home, although it may be hard to part ways with your place, it could help put you in a better financial situation. You may be offered several solutions with your lender to delay payments or restructure your loan, but that may only delay the inevitable or put a lot of financial strain on you. So selling your house after foreclosure begins may be the best option.
You will need to figure out a selling strategy before you list, though. Usually, people either list with an agent or sell by owner. Just remember that both may include costly commissions that could affect the amount you make upon your home’s sale.
Another thing to remember is that selling your house may be a little risky, given the timeframe you need to sell your house to avoid foreclosure. Also, you might need to make repairs and get the house ready to list to have a successful sale.
Selling Your House to a Cash Home Buyer
Another tip to avoid foreclosure in Vermont is to sell your house to a cash home buyer. This will help you have a guaranteed offer and closing date. Cash home buyers also can buy your house as-is, no repairs or renovations are needed. And if you’re concerned about paying costly commissions, homebuyers don’t charge commissions or service fees and will even help pay closing costs. Working with a local home buyer would be helpful to avoid foreclosure and sell your house fast. If you’d like to work with a local we buy houses in Burlington company, Burlington House Buyers is a great family-owned company.
For more benefits of selling a house for cash, click here.
Consider a Short Sale
Selling in a short sale is another option. Short sales are different from listing on your own. The lender is usually involved with the sale and approves or disapproves offers. Waiting for the perfect offer to be made could take months. Also, with short sales, the property is sold for less than the amount due on the mortgage, and the proceeds from the sale go to the lender. The lender can either forgive the difference or get a deficiency judgment which is allowed in Vermont. If there is a deficiency between the borrower’s total mortgage debt and the short sale price it sold for, the bank can file a deficiency judgment, making the borrower pay the difference.
Applying for Forbearance
You can try applying for forbearance. Forbearance is where your mortgage lender allows you to pause or reduce your payments for a limited period of time. However, forbearance does not erase what you owe. You will still have to repay any missed or reduced payments in the future. But the types of forbearance available vary by loan type.
Restructuring Your Mortgage Loan
Sometimes lenders seem like the bad guys when they’re the ones initiating the foreclosure process, but one way to avoid foreclosure is to try to work something out by restructuring your mortgage loan. Until the time your property is scheduled for auction, most lenders would prefer to work something out or figure out a compromise. This would allow you to get back on your feet with your mortgage and void foreclosure VT.
Filing bankruptcy is a big deal, so this option should be considered as a last resort. Bankruptcy will stop foreclosure or at least freeze the process. Filing bankruptcy will buy you more time to replace your lost job or recover financially from temporary hardships, but it doesn’t let you off the hook for your debts. The law requires your creditors and mortgage company to work in good faith with you to develop a responsible repayment plan so you can get back on track. However, if you consider this option consulting with a bankruptcy attorney would be advised to determine if filing bankruptcy is a good strategy for you.
Selling Your House Fast in VT
If you’ve received a foreclosure notice of default or are starting to get behind on mortgage payments in Burlington, selling your house would be a great solution. However, you’ll need to do everything you can to sell your home fast in VT. Even though foreclosure is a process, the sooner you can stop the foreclosure, the better, especially to relieve stress and uncertainty.
There are several ways you can go about selling your house, however, there is no guarantee that selling with a realtor or by owner will produce a fast home sale. Since time is of the essence, you will need to do everything you can to have a successful sale.
As of March 2021, the average days on the market in Burlington for a home to receive an offer is 90-days. That doesn’t include the typical 30-60 day escrow period before officially selling. So you’re looking at 120-150 days until everything is complete. The foreclosure timeline is typically 210 days that only leaves a few months to sell your home, move and avoid foreclosure.
Selling a house fast will include doing repairs, cleaning, decluttering, and staging your house to attract potential buyers. You’ll also want to figure out a strategic marketing strategy and use listing sites and social media to reach multiple buyers. Being flexible with showings and hosting open houses is also helpful.
If you’re going through the foreclosure process, it can be stressful, but it’s good to know you have options besides losing your house to a foreclosure sale.
Selling your home during a foreclosure is possible, however, you’ll need to consider your options and find a buyer willing to close quickly.
Whatever you end up deciding to do to stop the foreclosure process, just make sure you notify your lender of your decision. They’ll want to know your plans to become current on your mortgage or if you plan to pay it off by selling the home.
If you’re concerned about the time it may take to sell or expensive agent commissions, you can always contact Burlington House Buyers and get a cash offer if you’d like to avoid the hassle and sell quickly.
Hopefully, all this information will help you develop a plan to avoid foreclosure and get in a better position financially for you and your family.