Judicial and non-judicial foreclosure is available in Montana. Primary service instruments are deed of trust and mortgage. The timeline for foreclosure in Montana varies by process, but typically last 150 days. Right of Redemption and deficiency judgments are not allowed.
In Montana, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Power of Sale Foreclosure Guidelines & Procedures:
- A notice of sale must be recorded in the county where the property is located and then:
- mailed, by registered or certified mail, to the borrower at his last known address at least 120 days before the foreclosure sale;
- published once a week for three (3) successive weeks in a newspaper of general circulation in the county where the property is located; and
- posted on the property at least twenty (20) days before the foreclosure sale.
- The notice must contain:
- The trustee must conduct the sale between the hours of 9:00 am and 4:00 pm at the courthouse in the county where the property is located.
- The property must be sold at public auction to the highest bidder.
- The sale may be postponed for up to fifteen (15) days by posting a notice at the time and place where the sale was originally scheduled.
- Lenders may not obtain a deficiency judgment against the borrower and the borrower has no rights of redemption.
Additional Related Law:
- Real estate may be foreclosed on by filing a lawsuit or by conducting a non-judicial private foreclosure sale in compliance with Montana law.
- Montana has some unusual mortgage provisions that have been largely replaced by the Small Tract Financing Act of Montana for homesteads and small business real estate.
- If the tract of land is 15 acres or less, then the lender may use a trust deed that provides for a relatively quick and inexpensive foreclosure procedure.
- Unless the Small Tract Financing Act applies, then the lender must foreclose either by filing a lawsuit and seeking an order of sale, or else following a special foreclosure procedure.
- Under Montana's special foreclosure procedures, if applicable, the lender or person conducting the foreclosure sale must publish, post and serve a foreclosure notice at least 30 days in advance of the foreclosure sale.
- The notices must be advertised in a newspaper where the real estate is located, and if there is no newspaper, then by posting the notices in five conspicuous places in the county.
- Two other notices must be posted in conspicuous places in the township in which the land is situated, and one such notice must be in such a conspicuous place as will be most likely to give notice to all persons of the sale, and one must be posted at the front door of the county courthouse.
- The notice of sale must be further served on the occupant of the property to be foreclosed on and upon every person claiming an interest in the property who may be found in the State of Montana.
Small Tract Financing Act Foreclosure Procedure
- If the tract of land is less than 15 acres, then the Small Tract Financing Act applies to the foreclosure under the power sale provisions of a deed of trust.
- If there is a default on ' loan obligation’ secured by the deed of trust, and then recorded a notice of sale, duly executed and acknowledge by the trustee named in the deed of trust, which sets forth proper information, then the foreclosure may be done out of court.
- The contents of the foreclosure notice must include:
Mailing of Foreclosure Notices
- The trustee, at least 120 days before the date fixed for the foreclosure sale, must mail foreclosure notices by registered or certified mail to the following persons:
- The borrower, at the borrower's last known address
- Any person who recorded a request for notice
- Any record title owner as of the notice filing date
- At least 20 days before the date fixed for the trustee's sale, a copy of the recorded notice of sale must be posted in a conspicuous place on the property to be sold. The trustee may request the sheriff or constable of the county to post the notice.
- A copy of the notice shall be published in a newspaper of general circulation in the county in which the property is located once per week for three successive weeks.
- The posting and the last publication shall be made at least 20 days before the date fixed for the trustee's sale.
- On or before the date of the sale the trustee must record an affidavit staling that the requirements of mailing, posting and publication have been met.
- At the date, time and place specified for foreclosure in the notice of sale, the trustee or his or her attorney shall sell the property at public auction to the highest bidder.
- The sale may be postponed up to 15 days by a proclamation made the time the foreclosure sale would otherwise have taken place.
- The purchaser must pay the high bid price in cash.
- In return, the purchaser will receive a trustee's deed.
- If the purchaser fails to pay, then the trustee can resell the proper at any time to the highest bidder.
- The trustee may reject any further bidding by a bidder who fails to produce cash in response to winning a bid.
- Although the old statutes provided for a one year right of redemption, the Small Tract Financing Act eliminates the borrower's right to redeem after a properly conducted foreclosure sale.
- Montana does not allow a deficiency judgment unless the foreclosure was done by filing a lawsuit and the sale proceeds were insufficient to pay the judgment.
- Small Tract Financing Act foreclosures done out of court by advertisement do not give the lender any right to collect a deficiency from the borrower.
- The lender may obtain possession on the tenth day following the sale. Any person still in the house or property is to be treated as a tenant at will (a nonpaying tenant).
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