Montana foreclosure law

Montana foreclosures can be done in judicial and non-judicial processes; that is, lenders can foreclose in or out of court. The method followed depends on the contents of the mortgage contract. Both mortgages and deeds of trust are considered primary security instruments. The average foreclosure lasts about 150 days, or about five months.

Judicial foreclosure
The judicial foreclosure process is followed when the contract does not contain a Power of Sale. This is a clause or provision that allows the borrower to sell the home as payment in case the borrower defaults. Without the clause, the lender will have to go to court in order to foreclose.

In a judicial foreclosure, the amount of the debt is decreed by the court. The court also sets a deadline for settling this amount. If the borrower does not pay in time, a Notice of Sale will be issued and the home is put up for sale.

Non-judicial foreclosure
For contracts that contain a Power of Sale clause, the lender can foreclose without taking the case to court. The power can be used by the lender himself or extended to a representative called the trustee. If the Power of Sale indicates the time, date, and place of the sale, the foreclosure is done according to these terms. Otherwise, the following procedures are followed:

The lender first files a Notice of Sale in the county office where the home is located. The same notice is then mailed to the borrower at least 120 days before the sale date. It should also be published in a local newspaper once a week for three consecutive weeks, and posted on the home in default at least 20 days prior to the sale date.

This notice should state the names of the lender, borrower, and trustee, a description of the home, details of the default, the book and page of the deed’s recording, and the date, time, and venue of the foreclosure sale.

The sale is conducted by the trustee at the courthouse with jurisdiction in the county of the home in default. The public auction is done anytime from 9am to 4pm, and ends when the home is sold to the highest bidder. The lender or trustee may postpone the sale up to 15 days after the set date. A notice of the new time and location must be put up at the original venue.

Montana does not give a Right of Redemption, which means a borrower cannot regain possession of the home once the sale is made. Lenders also cannot file a deficiency suit, or sue the borrower for additional claims not covered by the foreclosure sale.

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