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Rule 80.1 – Foreclosure of Mortgages and Judgment Liens

May 14, 2021 | Civil Procedure, Vermont

(a)Remedy in Ejectment Abolished. The action of ejectment for foreclosure of a mortgage is hereby abolished. Proceedings for foreclosure shall be by civil action under the Rules of Civil Procedure as modified by this rule.
(b)Complaint; Process.

(1)Complaint. The complaint in an action for foreclosure shall set forth the name of the mortgagor and mortgagee, the date of the mortgage deed, the description of the premises, the debt or claim secured by the mortgage, any attorney’s fees claimed under an agreement in the mortgage or other instrument evidencing indebtedness, any assignment of the mortgage, the condition contained in the mortgage deed alleged to have been breached, the names of all parties in interest and, as to each party in interest, the date of record of the instrument upon which the interest is based, shall pray that defendants’ equity of redemption in the premises be foreclosed and explain that the defendant or defendants must enter their appearance in order to receive notice of the foreclosure judgment which will set forth the amount of money they must deposit to redeem the premises and the period of time allowed them to deposit this amount. The plaintiff shall attach to the complaint copies of the original note and mortgage deed and proof of ownership thereof, including copies of all original endorsements and assignments of the note and mortgage deed. The plaintiff shall plead in its complaint that the originals are in the possession and control of the plaintiff or that the plaintiff is otherwise entitled to enforce the mortgage note pursuant to the Uniform Commercial Code. All parties in interest shall be joined as parties defendant. Failure to join any party in interest shall not invalidate the action nor any subsequent proceedings as to those joined. A claim for foreclosure in an action under this paragraph may not be joined with a claim for a deficiency except when a defendant in the answer has requested foreclosure pursuant to a power of sale in the mortgage.
(2)Service of Process. The summons and complaint shall be served upon all persons joined as parties defendant by any appropriate method provided in Rule 4 of these rules, except that if the present whereabouts of a person claiming an interest in the premises by virtue of an attachment thereof under judicial process cannot by due diligence be ascertained so as to permit service in person by mail under Rule 4(d), (e), (f), or (k), the summons and complaint may be served personally upon the person’s attorney of record in the proceeding in which such attachment was levied. If service cannot by due diligence be made by any of the foregoing methods it may be made by publication as provided in Rule 4(g).
(3)Notice to be Served and Filed with Summons and Complaint. Two copies of the notice form, Important Notice to Homeowner, approved by the Court Administrator must be served and filed as the top page of the summons and complaint in any action to foreclose a mortgage on a residence. If the notice is not incorporated, the clerk will not accept the complaint for filing under Rule 3, and the summons and complaint may not be served by an officer, attorney, or other authorized person under Rule 4.

NOTICE TO HOMEOWNER

THIS IS A FORECLOSURE CASE AGAINST YOU.

YOU MAY LOSE YOUR HOME.

THE VERMONT SUPREME COURT REQUIRES THAT THIS NOTICE BE GIVEN TO YOU.

THIS IS NOT LEGAL ADVICE.

________________________________________________________________________

TO BE INFORMED OF THE NEXT STEPS IN THE COURT CASE, YOU MUST GIVE THE COURT YOUR MAILING ADDRESS AS SOON AS POSSIBLE. THE COURT’S ADDRESS IS ON THE “SUMMONS” ATTACHED TO THIS NOTICE.

READ THE SUMMONS THAT IS PART OF THE PACKAGE OF PAPERS ATTACHED TO THIS NOTICE. IT EXPLAINS OTHER IMPORTANT INFORMATION ABOUT YOUR COURT CASE. YOU SHOULD ALSO TALK TO A LAWYER IF POSSIBLE.

TO GET FREE HELP IN WORKING WITH YOUR LENDER TO TRY TO KEEP YOUR HOME, OR IN DECIDING WHETHER YOU CAN AFFORD TO KEEP YOUR HOME, YOU CAN CALL THE NUMBERS BELOW:

1. Vermont Homeownership Centers: (call the one closest to your residence)

Barre Office: 802-476-4493 www.cvclt.org

Brattleboro Office: 802-246-2109 www.w-wht.org

Burlington Office: 802-660-0642 www.getahome.org

Lyndonville Office: 802-535-3554 www.myvthome.org

Rutland Office: 802-438-2303 www.nwwvt.org

Springfield Office: 802-885-1856 www.w-wht.org

St. Albans Office: 802-527-2361 www.getahome.org

2. Vermont Department of Financial Regulation:

Tollfree Mortgage Assistance Program 1-888-568-4547

(c)Summary Judgment; Default. If within the time allowed under Rule 12(a) a party defendant files a verified answer or answer supported by affidavits, disclosing facts alleged to constitute a defense to plaintiff’s claim, plaintiff may within 14 days after service of the answer move for summary judgment. The complaint shall be treated as though supported by affidavit and the matter shall proceed as provided in Rule 56. The plaintiff may file a motion for default judgment, in accordance with Rule 55(a), against any defendant who fails to file such answer.
(d) Adjudication of Claims. The court shall adjudicate all claims of party defendants necessary to establish a redemption schedule, or otherwise necessary to formulate a judgment of foreclosure, prior to the entry of such judgment.
(e)Time of Redemption. The time of redemption shall, unless otherwise ordered, be as provided by law and shall run from the date of the entry of judgment. Motions to shorten the time of redemption may be filed and served with the complaint or at any time during the course of the proceedings. Such motions shall be heard on oral testimony, unless otherwise ordered by the court, with reasonable notice to those parties who have appeared.
(f)Accounting; Attorney’s Fees. If default has been entered as provided in subdivision (c) and the parties have not agreed upon the sum due and included it in a form of judgment, the clerk, upon request of the plaintiff accompanied by an affidavit as to the amount due and upon 7 days’ notice to all parties who have appeared, shall proceed to take an accounting and find the amount of principal, interest to date, and costs due. Such accounting shall be made upon forms furnished by the state. If defendant is an infant or incompetent person, a plaintiff entitled to judgment by default shall proceed as provided in Rule 55(b)(2). If the entry is not by default, an accounting shall be taken at such time and in such manner as the court may order. Reasonable attorney’s fees claimed by the plaintiff under the mortgage or other instrument evidencing indebtedness in an amount not exceeding two percent of the total of principal, interest, and costs due, or in a greater amount expressly agreed upon in the mortgage or other instrument, shall be allowed and included in the amount found due to the accounting without hearing, unless defendant objects, or plaintiff claims a higher fee in the demand for judgment. Upon such objection or claim, attorney’s fees shall be set by the court after notice and hearing.
(g)Judgment.

(1)Form; Entry. Plaintiff shall file and serve upon all named defendants who have appeared a form of judgment together with a copy of any accounting taken in accordance with subdivision (f) of this rule, within 30 days after the entry of default or, if the case has been heard, within such time as the court may order. The court shall thereupon proceed in accordance with Rule 58 to approve and sign the form of judgment, and the clerk shall enter it. The judgment shall set forth the amount agreed to be due by the parties or found due at the accounting. The amount necessary to redeem the mortgaged premises shall include interest on the amount, exclusive of interest, found due at the accounting from the date of the accounting until the date of redemption. Such interest shall be calculated at the rate provided in the mortgage or other evidence of indebtedness, or at the rate allowed on judgments by law, whichever is higher. The form of judgment must contain the following statement in bold print: “If you wish to appeal this judgment, you must request permission to appeal by motion filed with the Court within 14 days of the date of entry of the judgment .”
(2)Owner-occupied Residences of Four Units or Less. In any foreclosure action involving a dwelling house of four units or less that is currently occupied by the owner as a principal residence at the time a foreclosure judgment or confirmation order is applied for:

(A) A judgment and decree of foreclosure may not issue, or if a decree has been issued a sale will not be confirmed by the court, until plaintiffs counsel has submitted a Certification of Counsel in the following form:

[heading and caption]

CERTIFICATION OF COUNSEL

I, ____________, certify as follows:

I am an attorney duly licensed to practice in the state of Vermont and am the attorney of record for plaintiff in the above-captioned mortgage foreclosure action. As such, I am fully aware of the proceedings in this case.

On (date) I communicated with (name and title), a representative of plaintiff, who informed me that [he] [she] (a) has personally reviewed plaintiff’s documents and records relating to this case; (b) has reviewed the summons and complaint and affidavits and other papers filed in this matter in support of foreclosure; and (c) has confirmed both the factual accuracy of these court filings and the accuracy of the notarizations contained therein.

Based upon my communication with the named representative, as well as upon my own inspection of the papers filed with the court and other diligent inquiry, I certify that, to the best of my knowledge, information, and belief, the summons, complaint, affidavits, and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects.

I understand my continuing obligation to amend this Certification in light of newly discovered facts following its filing. I understand that the court will rely on this Certification in considering any motion or request for relief.

Dated: __________________ Signed: __________________

(B) A judgment and decree of foreclosure may not issue in a case in which plaintiff’s counsel or plaintiff has submitted an affidavit for default, summary judgment, or amounts due, unless the affidavit is signed by or on behalf of the plaintiff and states the following:

(i) the title and status of the affiant as employee or agent, as well as the fact that the affiant is authorized to act for the plaintiff in the proceeding and a description of the source of such authority (and, if by power of attorney or corporate resolution, a copy must be attached);
(ii) that the affiant has personally reviewed the records relating to the affidavit and has personal knowledge of the facts set forth in the affidavit; and
(iii) a description of the records reviewed to determine the facts set forth.
(C) The court may request supplemental documents relating to the authority of the signer of any affidavit or document to execute the instrument and may request supplemental information regarding the relationship between the entity and the plaintiff or any other matter related to adjudication of the case.
(D) Until all required affidavits have been filed, any sales of the property shall be stayed and the court shall not issue or authorize the issuance of foreclosure decrees, certificates of nonredemption, confirmations of sale, or writs of possession.
(h) Foreclosure by Sale. When foreclosure by sale is authorized and has been requested in accordance with law, the plaintiff shall provide in the form of judgment for the sale of the premises upon the expiration of the time of redemption. The form of judgment shall prescribe (1) the place and date of the sale, (2) the person who shall conduct the sale, (3) the terms upon which the sale is to be made, (4) whether the premises are to be sold as a whole or in parcels, (5) the notice to be given of said sale as provided by law, and (6) the custodian of the proceeds of the sale pending confirmation by the court.
(i)Appraisal of the Premises. The plaintiff in the form of judgment may provide for, or the court upon motion of a party at any time thereafter may order, an independent appraisal made of the fair market value of the premises.
(j)Proceeds of the Sale; Surplus, Deficiency.

(1)Surplus. In the event that the proceeds of the sale, after first deducting the reasonable expenses incurred in making the sale, exceed the amount due the plaintiff as determined by the court or by the clerk as provided in subdivision (f) of this rule, the court in its order of confirmation shall provide for the payment of the surplus to other parties defendant in order of the priority of their liens and to the defendant mortgagor. Each party defendant shall be entitled to the principal amount secured by his lien, interest to date, expenses of collection as authorized by law, and costs. If the amount secured by any lien is disputed, the court may issue a partial confirmation order including the provisions specified in subdivision (k) and an authorization that the sale expenses, the claim of the mortgagee and the claim of any persons with interests superior to that in dispute be paid. The court shall issue a final confirmation order to distribute the remaining proceeds. In the event that the proceeds of the sale exceed the amount due the plaintiff and the amounts due other parties defendant, the excess shall be paid to the defendant mortgagor.
(2)Deficiency. In the event that the proceeds of the sale are insufficient to meet the expenses incurred in making the sale and the amount due the plaintiff, the court shall provide in its order of confirmation for the payment of the reasonable expenses incurred in making the sale and the payment of the balance of the proceeds to the plaintiff on account of the amount due the plaintiff. If the plaintiff so requests in the complaint, the court may assess a judgment against the mortgagor for the deficiency. Where the mortgagee is the purchaser at the sale, any deficiency shall be limited to the difference between the fair market value of the premises at the time of sale, as determined by the court based on the appraisal provided in subdivision (i) and such other evidence as may be received, and the amount due the plaintiff plus the reasonable expenses incurred in making the sale.
(k)Order of Confirmation; Form. The order of confirmation shall state the names of all persons whose interest in the premises is foreclosed, including the defendant mortgagor, the plaintiff mortgagee and all parties defendant whose liens are junior to that of the plaintiff mortgagee; the name of the person to whom title is to be transferred; a legal description of the premises; and the name of each party defendant, if any, whose interest is superior to that of the plaintiff mortgagee and subject to whose interest in the premises the same are transferred.
(l)Foreclosure of Judgment Liens. This rule shall apply to foreclosure of a judgment lien pursuant to statute. In such an action, the complaint shall state the name of the judgment creditor and the judgment debtor; a description of the judgment to include the court, docket number of the underlying action, the date of issuance and the amount; the amount of the outstanding debt; the date and place of recording of the judgment; a description of the property; whether the amount of the outstanding debt is claimed to exceed the value of the real property being foreclosed; an allegation that the judgment lien has not been satisfied in accordance with law and a prayer that defendant’s equity of redemption in the property be foreclosed and, if appropriate, that the property be sold.
(m)Permission to Appeal. When the judgment is for foreclosure of the mortgage, the permission to appeal, required by law, shall be requested by motion filed within 14 days of the date of the entry of the judgment or order to be appealed from. The running of the time for filing a motion is terminated to the extent provided, and for the reasons stated, in V.R.A.P. 4. The running of the time of redemption shall be tolled and the effectiveness of the judgment shall be stayed when a motion is filed under this subdivision and continue until the motion to appeal is decided adversely to the moving party or until the appeal is decided. The court may condition the appeal or the stay under this subdivision upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.

Vt. R. Civ. P. 80.1

Amended March 12, 1975, eff. April 1, 1975; Dec. 11, 1980, eff. Feb. 2, 1981; Dec. 28, 1981, eff. March 1, 1982; Jan. 9, 1985, eff. March 15, 1985; Nov. 9, 1987, eff. March 1, 1988; Oct. 19, 1999, eff. Dec. 31, 1999; June 28, 2001, eff. Sept. 1, 2001; Dec. 17, 2008, Jan. 1, 2009; Dec. 10, 2009, Jan. 1, 2010; 2009, No. 132 (Adj. Sess.), § 13, eff. July 1, 2010; Dec. 21, 2010, eff. Dec. 21, 2010; Dec. 21, 2011, eff. Jan. 1, 2012; Dec. 21, 2011, eff. Feb. 20, 2012; Dec. 2, 2013, eff. Feb. 3, 2014; Dec. 17, 2013, eff. Jan. 1, 2014; March 27, 2014, eff. May 27, 2014; amended Sept. 20, 2017, eff. Jan. 1, 2018; amended Nov. 5, 2019, eff. Jan. 6, 2020.

Reporter’s Notes-2020 Amendment

Rule 80.1(c) is amended for consistency with the simultaneous amendment of Rule 55(a). See Reporter’s Notes to that amendment.

Reporter’s Notes-2018 Amendment

Rule 80.1 is amended to extend its 6- and 10-day time periods to 7 and 14 days consistent with the simultaneous “day is a day” amendments to V.R.C.P. 6.

Reporters Notes-2009 Emergency Amendment

Rule 80.1(b)(3) is added as an emergency amendment to provide relief to homeowners faced with foreclosure in the present financial situation. The number of foreclosures has been increasing in Vermont as it has across the country. Resources are available through state and nonprofit agencies to assist homeowners in such cases. Most foreclosure defendants are unrepresented and may not be aware of these resources, or learn of them in time to take effective advantage of them. The amended rule will require plaintiffs filing residential foreclosure actions to include as the top page to be served with all foreclosure complaints the following notice (in the same format and font size), a copy of which must also be filed with the court. Failure to include the form will result in refusal of the summons and complaint for service and filing.

Reporter’s Notes-2010 Amendment

The emergency amendment adding V.R.C.P. 80.1(b)(3) to require a notice informing defendants in residential foreclosure cases of free resources available to assist them in trying to arrange to keep their homes, or, where appropriate, make the most favorable arrangements for selling the homes and paying off the debt, was promulgated on December 17, 2008, effective January 1, 2009, with a direction that the Civil Rules Advisory Committee report on any comments received by September 30, 2009. No comments were received. The rule has been found beneficial and is continued for two additional years while other amendments to Rule 80.1, designed to allow it to operate more fairly in the present financial climate, are being considered.

Reporter’s Notes-2010 Emergency Amendm

Rule 80.1(g) is amended to address a pressing problem that has emerged in recent months. There have been public disclosures, both in the media and in individual cases filed in Vermont courts, that affidavits filed by lenders and servicers in foreclosure cases have contained significant inacurracies. These have included statements that the affiants had reviewed files they had not reviewed, statements that affiants had reviewed attached military service records that were actually dated after the date of the affidavit, and notarizations by notaries who had not witnessed the signatures they were notarizing. These inacurracies in numerous affidavits raise serious questions for judges about the reliability of all of the other information in the affidavits, and about the reliability of affidavits filed in other cases. The problem is especially acute, because many lenders are national concerns with which Vermont counsel have little or no personal contact, and the affidavits are often the basis for the granting of summary judgment or default motions, or for the amounts the borrowers are ordered to pay to save the property from foreclosure in situations in which the property is the borrower’s primary residence. The amended rule is necessary to establish statewide uniformity in dealing with these matters.

Accordingly, former Rule 80.1(g) is designated Rule 80.1(g)(1), and Rule 80.1(g)(2) is added to make special provision, consistent with 12 V.S.A. § 4531a(a), for all foreclosure actions involving owner-occupied residences of four units or less. In these actions, subparagraph (2)(A) provides that judgment and decree will not issue or a sale will not be confirmed until plaintiff’s counsel certifies, in a form set out in the amended rule, that counsel’s communication with a plaintiff’s representative, inspection of papers that have been filed, and other diligent inquiry have established the completeness and accuracy of all documents supporting the claim to the best of counsel’s knowledge, information, and belief. This certification is a specific application of the requirements of Rule 11 to the foreclosure situation. The terms of the certification make clear that it must be updated in light of factual changes and will be relied upon by the court.

Further, subparagraph (2)(B) provides that judgment and decree will not issue on the basis of an affidavit submitted for the plaintiff to support default, summary judgment, or amounts due unless the affidavit sets forth the status and authority of the affiant and the affiant’s personal review of specific records and personal knowledge of the facts sworn to. Under subparagraph (C), the court may request supplemental documents or information concerning these matters and other issues, such as standing, that the affidavits do not resolve. Subparagraph (D) provides that, until all required affidavits have been filed, sales of the property are stayed, and the court may not issue or authorize issuance of foreclosure decrees, certificates of non-redemption, confirmations of sale, or writs of posession.

Reporter’s Notes-2014 Amendment

Rule 80.1(b)(3) was originally adopted as an emergency amendment on December 7, 2008, effective January 1, 2009, extended by subsequent orders until December 31, 2013, and amended by order of December 2, 2013 effective February 3, 2014. The rule as further amended and extended until December 31, 2015, by order of December 17, 2013, effective January 1, 2014, is now made permanent to implement the statute 12 V.S.A. §§ 4631-4637, and because of its continued benefit to homeowners faced with foreclosure.