Quick Facts
– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: Yes
– Primary Security Instruments: Deed of Trust, Mortgage
– Timeline: Typically 150 days
– Right of Redemption: No
– Deficiency Judgments Allowed: Varies
In Montana, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure
In judicial foreclosure, a court decrees the amount of the borrower’s debt and gives them a short time to pay. If the borrower fails to pay within that time, the court will issue a notice of sale.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage in which the borrower pre-authorizes the sale of the property to pay off the balance on loan in the event of their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines.”
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place, and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
Strict Notice Requirements
A notice of sale must be recorded in the county where the property is located and then:
- By registered or certified mail, Mailed 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.
- Posted on the property at least twenty (20) days before the foreclosure sale.
The notice must contain the time, date, and place of sale, the borrowers, lenders’, and trustees’ names, a description of both the property and the default, and the book and page where the deed is recorded.
The trustee must conduct the sale between 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.
Postponement of Sale
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 redemption rights.
