The Vermont Statutes Online

Title 12: Court Procedure

Chapter 163: Chancery Proceedings

• Subchapter 001: GENERAL PROVISIONS; PROCEEDINGS BEFORE TRIAL

• §§ 4311-4328. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• Subchapter 002: TRIAL OF CAUSES

• §§ 4361-4370. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• § 4371. Repealed. 1959, No. 261, § 68.

• Subchapter 003: DEATH OF PARTY; REVIVOR OF ACTION

• §§ 4401-4411. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• Subchapter 004: INJUNCTIONS

• §§ 4441-4446. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• § 4447. Damages on final judgment

  When an injunction has been dissolved by a final judgment in favor of the enjoined party, he or she shall be entitled to recover his or her actual damages caused by the wrongful issuing of the injunction. (Amended 1971, No. 185 (Adj. Sess.), § 120, eff. March 29, 1972.)

• Subchapter 005: RECEIVERS

• § 4481. Receivers of goods attached

  When the stock in a manufacturing establishment consisting of articles in the process of manufacture, with or without the materials necessary for the manufacture of the same, hereinafter referred to as “stock,” is taken by virtue of a writ of attachment in a civil action, and cannot be sold without a sacrifice, and cannot be kept without loss and damage, on the motion of a party interested to the presiding judge of the Superior Court in which the action is pending or by complaint to any other Superior judge, the judge may appoint in his or her discretion a competent person to receive the stock so attached, complete the manufacture thereof, dispose of the same on the terms most advantageous to the persons interested, and apply the proceeds under the direction of the judge:

  (1) to the payment of necessary expenses incurred by the receiver in the manufacture and sale of the stock;

  (2) to the payment of such sum as the judge deems reasonable to the receiver for his or her services;

  (3) to the payment of the costs of the proceedings;

  (4) the residue shall be applied as though the money were received by the officer, on the sale of the stock, by consent or otherwise, upon the original attachment. (Amended 1971, No. 185 (Adj. Sess.), § 121, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 4482. Notice of motion or complaint

  Notice shall be given to the parties to the attachment or their attorneys to appear and show cause why the prayer of the motion or complaint should not be granted before the receiver is appointed. (Amended 1971, No. 185 (Adj. Sess.), § 122, eff. March 29, 1972.)

• § 4483. Receiver’s bond

  Before an order issues for him or her to take possession of such stock, the receiver shall execute and deliver to the clerk of the court issuing the order a bond with sufficient sureties, in such sum as the court directs, conditioned on the faithful execution of his or her trust and a true accounting, under the direction of the court, for the property received under such order.

• § 4484. Order for possession

  Upon receipt of such bond, under the direction of the court, the clerk of the court shall deliver to the receiver an order to take possession of such stock, proceed in the manufacture and sale of the same as provided by sections 4481-4483 of this title, and require possessors of such stock to deliver same to the receiver. Such order shall be a sufficient warrant to the attaching officer or other possessor of such stock to deliver it to the receiver.

• § 4485. Borrowing money

  The presiding judge of the Superior Court in which the action is pending or other Superior judge may authorize the receivers or managers of property in the course of administration in that court, when the interest of the parties or property requires it, to borrow money for the proper and convenient discharge of their duties and on such terms, conditions, limitations, and security as shall to the court seem fit. This section shall not prevent the receivers or managers from borrowing money for temporary purposes. (Amended 1971, No. 185 (Adj. Sess.), § 123, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• Subchapter 006: FORECLOSURE OF MORTGAGES

• §§ 4521, 4522. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• §§ 4523-4533a. Repealed. 2011, No. 102 (Adj. Sess.), § 2.

• Subchapter 007: DECREES AND RECORDS

• §§ 4561-4565. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• Subchapter 008: APPEALS AND REVIEW

• § 4601. Appeals in foreclosure actions

  When a judgment is for the foreclosure of a mortgage, permission of the court shall be required for review. (Amended 1959, No. 261, § 66; 1971, No. 185 (Adj. Sess.), § 129, eff. March 29, 1972.)

• §§ 4602-4613. Repealed. 1971, No. 185 (Adj. Sess.), § 237, eff. March 29, 1972.

• Subchapter 009: MEDIATION IN FORECLOSURE ACTIONS

• § 4631. Mediation program established

  (a) This subchapter establishes a program to assure the availability of mediation and application of government loss mitigation program requirements in actions for foreclosure of a mortgage on any dwelling house of four units or less that is occupied by the owner as a principal residence.

  (b) The requirements of this subchapter shall apply to all foreclosure actions on dwelling houses of four units or less that are occupied by the owner as a principal residence unless:

  (1) the loan involved is not subject to any government loss mitigation program requirements;

  (2) prior to commencing the foreclosure action, the mortgagee or a representative of the mortgagee met with or made reasonable efforts to meet with the mortgagor in person in Vermont to discuss any applicable loss mitigation options; and

  (3) the plaintiff in the foreclosure action certifies in a separate document filed with its complaint that the requirements of subdivisions (1) and (2) of this subsection have been satisfied and describes its efforts to meet with the mortgagor in person to discuss applicable loss mitigation efforts.

  (c) To be qualified to act as a mediator under this subchapter, an individual shall be licensed to practice law in the State and shall be periodically required to take specialized, continuing legal education training courses on foreclosure prevention or loss mitigation approved by the Vermont Bar Association.

  (d) This subchapter shall not apply to a commercial loan.

  (e) As used in this subchapter:

  (1) “Commercial loan” means any loan described in 9 V.S.A. § 46(1), (2), or (3).

  (2) “Government loss mitigation program” means:

  (A) the federal Home Affordable Modification Program (HAMP);

  (B) any loss mitigation program for loans owned or guaranteed by government-sponsored entities such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the U.S. Federal Housing Administration, or the U.S. Department of Veterans Affairs;

  (C) any loss mitigation program for loans guaranteed by the U.S. Department of Agriculture-Rural Development that are not owned by an instrumentality of the United States or the State of Vermont; or

  (D) a settlement agreement with a government entity, or any state or federal law or regulation, regarding the notification, consideration, or offer of loss mitigation options. (Added 2009, No. 132 (Adj. Sess.), § 4; amended 2013, No. 8, § 1, eff. Dec. 1, 2013.)

• § 4632. Opportunity to mediate

  (a) In an action for foreclosure subject to this subchapter, whenever the mortgagor requests mediation prior to four months after judgment is entered and before the end of the redemption period specified in the decree, the court shall refer the case to mediation pursuant to this subchapter, except that the court may:

  (1) for good cause, shorten the four-month period or thereafter decline to order mediation; or

  (2) decline to order mediation if the mortgagor requests mediation after judgment has been entered and the court determines that the mortgagor is attempting to delay the case, or the court may for good cause decline to order mediation if the mortgagor requests mediation after judgment has been entered.

  (b) Unless the mortgagee and mortgagor agree otherwise or the court so orders for good cause shown, all mediation shall be completed prior to the expiration of the redemption period specified in the decree and within 120 days of the mediator’s appointment. The redemption period shall not be stayed on account of pending mediation.

  (c) In an action for foreclosure of a mortgage subject to this subchapter, the mortgagee shall serve upon the mortgagor two copies of the notice described in subsection (d) of this section with the summons and complaint. The Supreme Court may by rule consolidate this notice with other foreclosure-related notices as long as the consolidation is consistent with the content and format of the notice under this subsection.

  (d) The notice required by subsection (c) of this section shall:

  (1) be on a form approved by the Court Administrator;

  (2) advise the homeowner of the homeowner’s rights in foreclosure proceedings under this subchapter;

  (3) state the importance of participating in mediation even if the homeowner is currently communicating with the mortgagee or servicer;

  (4) provide contact information for legal services; and

  (5) incorporate a form that can be used by the homeowner to request mediation from the court.

  (e) The Vermont Bar Association (VBA) shall have the authority to establish a fair and neutral mediator-selection process. If the mortgagee and mortgagor are unable to select a mediator through the selection process established by the VBA, the court shall appoint a qualified mediator for the case. (Added 2009, No. 132 (Adj. Sess.), § 4; amended 2013, No. 8, § 1, eff. Dec. 1, 2013.)

• § 4633. Mediation

  (a) During all mediations under this subchapter:

  (1) The parties shall address the available foreclosure prevention tools and, if disputed, the amount due on the note for the principal, interest, and costs or fees.

  (2) The mortgagee shall use and consider available foreclosure prevention tools, including reinstatement, loan modification, forbearance, and short sale, and the applicable government loss mitigation program requirements and any related “net present value” calculations used in considering a loan modification conducted under this subchapter.

  (3) The mortgagee shall produce for the mortgagor and mediator:

  (A) if a modification or other agreement is not offered, an explanation why the mortgagor was not offered a modification or other agreement; and

  (B) for any applicable government loss mitigation program, the criteria for the program and the inputs and calculations used in determining the homeowner’s eligibility for a modification or other program.

  (4) Where the mortgagee claims that a pooling and servicing or other similar agreement prohibits modification, the mortgagee shall produce a copy of the agreement. All agreement documents shall be confidential and shall not be included in the mediator’s report.

  (b)(1) In all mediations under this subchapter, the mortgagor shall make a good faith effort to provide to the mediator within a time determined by the court or mediator information on his or her household income, and any other information required by any applicable government loss mitigation program.

  (2) Within 45 days of appointment, the mediator shall hold a premediation telephone conference to help the mortgagee and mortgagor complete any necessary document exchange and address other premediation issues. At the premediation telephone conference, the mediator shall at a minimum document and maintain records of the progress the mortgagee and mortgagor are making on financial document production, any review of information that occurs during the conference, any request for additional information, the anticipated time frame for submission of any additional information and the lender’s review of the information, the scheduling of the mediation session, and which of the persons identified in subdivision (d)(1) of this section will be present in person at the mediation or that the parties and the mediator have agreed pursuant to subsection (e) of this section that personal presence at the mediation is not required.

  (3) During the mediation, the mediator shall document and maintain records of:

  (A) agreements about information submitted to the mediator;

  (B) whether a modification or other foreclosure alternative is available and, if so, the terms of the modification;

  (C) if a modification or other foreclosure alternative is not available, the reasons for the unavailability; and

  (D) the steps necessary to finalize the mediation.

  (c) The parties to a mediation under this subchapter shall cooperate in good faith under the direction of the mediator to produce the information required by subsections (a) and (b) of this section in a timely manner so as to permit the mediation process to function effectively.

  (d)(1) The following persons shall participate in person or by telephone in any mediation under this subchapter:

  (A) the mortgagee, or any other person, including the mortgagee’s servicing agent, who meets the qualifications required by subdivision (2) of this subsection (d);

  (B) counsel for the mortgagee; and

  (C) the mortgagor, and counsel for the mortgagor, if represented.

  (2) The mortgagee or mortgagee’s servicing agent, if present, shall have:

  (A) authority to agree to a proposed settlement, loan modification, or dismissal of the foreclosure action;

  (B) real-time access during the mediation to the mortgagor’s account information and to the records relating to consideration of the options available in subdivisions (a)(2) and (a)(3) of this section, including the data and factors considered in evaluating each such foreclosure prevention tool; and

  (C) the ability and authority to perform government loss mitigation program-related “net present value” calculations and to consider other options available in subdivisions (a)(2) and (a)(3) of this section during the mediation.

  (e) The mediator may permit a party identified in subdivision (d)(1) of this section to participate in mediation by telephone or videoconferencing. The mortgagee and mortgagor shall each have at least one of the persons identified in subdivision (d)(1) of this section present in person at the mediation unless all parties and the mediator agree otherwise in writing.

  (f) The mediator may include in the mediation process under this subchapter any other person the mediator determines would assist in the mediation.

  (g) Unless the mortgagee and mortgagor agree otherwise, all mediations under this subchapter shall take place in the county in which the foreclosure action is brought pursuant to subsection 4932(a) of this title. (Added 2009, No. 132 (Adj. Sess.), § 4; amended 2013, No. 8, § 1, eff. Dec. 1, 2013.)

• § 4634. Mediation report

  (a) Within seven days of the conclusion of any mediation under this subchapter, the mediator shall report in writing the results of the process to the court and both parties, and shall provide a copy of the report to the Office of the Attorney General for data collection purposes. The report submitted to the Attorney General’s office shall include, in addition to the information identified in subsection (b) of this section, all applicable government loss mitigation program criteria, inputs, and calculations performed prior to or during the mediation and all information related to the requirements in subsection 4633(a) of this title. The report submitted to the Attorney General’s office shall be confidential, and shall be exempt from public copying and inspection under 1 V.S.A. § 317, provided that any public report by the Attorney General may include information in aggregate form.

  (b) The report required by subsection (a) of this section shall not disclose the mediator’s assessment of any aspect of the case or substantive matters discussed during the mediation, except as is required to report the information required by this section. The report shall contain all of the following items:

  (1) The date on which the mediation was held, including the starting and finishing times.

  (2) The names and addresses of all persons attending, showing their role in the mediation and specifically identifying the representative of each party who had decision-making authority.

  (3) A summary of any substitute arrangement made regarding attendance at the mediation.

  (4) [Repealed.]

  (5) The results of the mediation, stating whether full or partial settlement was reached and appending any agreement of the parties.

  (6)(A) A statement as to whether any person required under subsection 4633(d) of this title to participate in the mediation failed to:

  (i) attend the mediation;

  (ii) make a good faith effort to mediate; or

  (iii) supply documentation, information, or data as required by subsections 4633(a)-(c) of this title.

  (B) If a statement is made under subdivision (A) of this subdivision (6), it shall be accompanied by a brief description of the applicable reason for the statement. (Added 2009, No. 132 (Adj. Sess.), § 4; amended 2013, No. 8, § 1; 2015, No. 23, § 145.)

• § 4635. Compliance with obligations

  (a) Upon receipt of a mediator’s report required by subsection 4634(a) of this title, the court shall determine whether the mortgagee or servicer has complied with all of its obligations under subsection 4633(a) of this title, and, at a minimum, with any applicable government loss mitigation program requirements. The court may make such a determination without a hearing unless the court, in its discretion, determines that a hearing is necessary.

  (b) If the mediator’s report includes a statement under subdivision 4634(b)(6) of this title, or if the court makes a determination of noncompliance with the requirements under subsection 4635(a) of this title, the court may impose appropriate sanctions against the noncomplying party, including:

  (1) tolling of interest, fees, and costs;

  (2) reasonable attorney’s fees;

  (3) monetary sanctions;

  (4) dismissal without prejudice; and

  (5) prohibiting the mortgagee from selling or taking possession of the property that is the subject of the action with or without opportunity to cure as the court deems appropriate.

  (c) No mediator shall be required to testify in an action subject to this subchapter. (Added 2009, No. 132 (Adj. Sess.), § 4; amended 2013, No. 8, § 1.)

• § 4636. Repealed. 2013, No. 8, § 1, eff. December 1, 2013.

• § 4637. No waiver of rights; costs of mediation

  (a) The parties’ rights in a foreclosure action are not waived by their participation in mediation under this subchapter.

  (b) The mortgagee shall pay the required costs for any mediation under this subchapter except that the mortgagor shall be responsible for the mortgagor’s own costs, including the cost of the mortgagor’s attorney, if any, and travel costs.

  (c) If the foreclosure action results in a sale with a surplus, the mortgagee may recover the full cost of mediation to the extent of the surplus. Otherwise, the mortgagee may not shift to the mortgagor the costs of the mortgagee’s or the servicing agent’s attorney’s fees or travel costs related to mediation but may shift up to one-half of the costs of the mediator. (Added 2009, No. 132 (Adj. Sess.), § 4.)