Montana Laws

Both judicial and non-judicial foreclosures are used in Montana, depending on the presence of Powers of Sale clauses in mortgages. If a Power of Sale clause exists, it gives the lender the right to pursue a foreclosure without the sanction of the court system. Since these provisions are very common, judicial foreclosures are only needed when there is a problem with the property title, or in the rare case that a Power of Sale clause does not exist.

First, the lender must file a Notice of Default with the office of county records. The lender also schedules a tentative date for a foreclosure sale at this time, but it must be scheduled at least 120 days in advance. Under Montana foreclosure law, the lender is not required to notify the homeowner before beginning the foreclosure process, but the lender must do so if the mortgage agreement calls for it. The homeowner can halt the foreclosure process at any point before the sale begins by paying off the default debt owed to the lender.

A judicial foreclosure begins when the lender files a suit in court against the homeowner. The court hears the case, and if it decides a default has occurred will order the homeowner to pay within a short period of time. If they do not pay, the court will order their property to be sold at public auction in order to reclaim the amount lost by the lender on the loan.

In order to properly advertise the sale, a Notice of Sale must be posted on the property in question at least 20 days before the sale takes place. It must also appear weekly for three weeks in a local newspaper. The homeowner is entitled to receive a copy of the Notice of Sale at least 120 days before the sale begins.

On the date in question, a court official or trustee of the lender auctions off the homeowner's property to the highest bidder, who must provide payment immediately. They are then issued a deed to the property and assume full ownership ten days after the deed has been issued.

In Montana, the original homeowner receives no rights to redemption. The lender does not have the right to seek a deficiency judgment against the homeowner for any amount not satisfied by the public sale of the property.

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