A Montana foreclosure can be conducted either in court or out of court, depending on the existence of a Power of Sale clause in the mortgage or deed of trust. The foreclosure process usually takes between 5 and 6 months.
In the case of an in-court foreclosure, called Judicial foreclosure, the court decides the appropriate amount due to the lender and gives the borrower a time constraint to pay the debt. If the borrower cannot pay the debt, then the lender is allowed to issue a Notice of Foreclosure Sale, (NOS).
With an out-of-court foreclosure, called a Non-Judicial Foreclosure, which is most common in Montana the lender starts the foreclosure process by filing a Notice of Sale with the county recorder. It is required that the sale be at least 120 days after this notice is filed, however the lender is not required to mail a Notice of Default (NOD) to the borrower before filing the notice of sale unless the mortgage or deed of trust has specific language requiring it.
Non-judicial Foreclosures are the most common in Montana. They occur when the terms of the mortgage or deed of trust allow the lender to sell the property if the borrower defaults.
At any time before the foreclosure sale, the borrower may stop the foreclosure by satisfying the debt; that is by paying the full default amount plus costs and all attorneys’ fees incurred.
Notice of Sale & Auction
For out-of-court foreclosures, a copy of the Notice of Sale is posted at the property in an obvious spot a minimum of 20 days before the sale. Additionally, the Notice of Sale is mailed to the borrower at least 120 days prior to the sale. Finally, the NOS must be published once a week for three consecutive weeks in a local newspaper.
Montana Foreclosure sales are by public auction, with the property going to the highest bidder. The auction is between 9 a.m. and 4 p.m. on a regular business day, on the sale date at the county courthouse. The winning bidder receives a deed transferring ownership and can take possession of the property after 10 days.
The sale is final. The borrower has no rights of redemption. The lender may not obtain a deficiency judgment against the borrower.