Vermont Passes New Law Prohibiting Foreclosures During the Coronavirus Crisis

Vermont lawmakers passed a ban on foreclosures, as well as evictions following foreclosures, during the coronavirus outbreak.

With the coronavirus (COVID-19) pandemic sending thousands of homeowners into financial distress, many states, along with the federal government, have passed laws and issued orders imposing foreclosure moratoriums for specific types of loans and in many places. These moratoriums, depending on the order or regulation, usually prohibit the initiation or continuation of foreclosures until the coronavirus crisis ends.

On May 14, 2020, Vermont Governor Phil Scott signed S.333 into law. This new law protects Vermont homeowners from foreclosure during the COVID-19 outbreak. Unoccupied homes, though, aren’t included in the ban.

Foreclosure Ban In Vermont During the Coronavirus Crisis

Vermont’s new law freezes foreclosures and evictions until the governor declares an end to the state of emergency, plus 30 days after that. (This time frame is called the "emergency period.")

Pending Foreclosures

Under the new law, all pending actions for foreclosures in Vermont, and any outstanding orders in those actions that could lead to the execution of a writ of possession (an eviction) against a tenant or resident, are stayed until the end of the emergency period.

New Foreclosures

During the emergency period, a residential mortgage lender may begin a foreclosure action, subject to some restrictions, including:

  • After the lender files the foreclosure action, the court must stay the action (halt further legal process) as of the date of filing until the end of the emergency period.
  • The plaintiff can’t attempt to serve, and a sheriff or constable shall not serve, any civil process.

Evictions After Foreclosures

During the emergency period, the courts can’t issue writs of possession:

  • in a strict foreclosure if the property isn’t redeemed, or
  • in a foreclosure by judicial sale when all periods of redemption expire.

Getting Mortgage Payment Relief Under Federal Law

Vermont's new law, however, doesn’t relieve the borrower's obligation to make mortgage payments during the coronavirus public health crisis. Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, though, a Vermont homeowner with a federally backed mortgage loan, regardless of delinquency status (meaning, even if you’re facing a foreclosure), who's experiencing a financial hardship that's due directly or indirectly to COVID-19, can get a forbearance. The forbearance period will last up to 180 days and can be extended up to 180 additional days.

Also, even if you don’t have a federally backed mortgage loan, your lender or servicer might offer different forms of mortgage help, like forbearances, modifications, or other alternatives. (To learn more about mortgage payment relief during the coronavirus pandemic, read How to Get Mortgage Payment Relief During the Coronavirus Outbreak.)

Effective date: May 14, 2020