Foreclosures For Sale Updated On: 03/19/10
Montana Foreclosure Laws
Montana Foreclosure Laws
Montana is generally known to function under title theory wherein the title of the property stays as assurance till the loan in question is completely paid off. Through this theory, a non-judicial recourse is taken to foreclose. The title is secured through a document referred to as a deed of trust.
The law in Montana also allows mortgages to function as liens on properties, and they can also be used to pursue judicial foreclosures through courts. The one unusual thing in Montana is that depending on the property’s size and the loan amount a trust indenture or mortgage is to be used. The Small Tract Financing Act of Montana allows trust indentures to be placed on properties that are not in excess of forty acres, and if the loan amount is greater than $500,000 a mortgage is needed. A large number of single-family home loans, therefore, come under the statute of trust indenture that was specially passed to provide a foreclosure method that was less painstaking than the judicial method.
A non-judicial foreclosure is the principal method followed to foreclose on a property in Montana. In this method, no court action is needed, but a notice of sale is needed. To sell the property to satisfy the loan that has been defaulted on, a trustee can make use of the power of sale clause which is generally incorporated in the trust indenture at the initial signing stage. Lenders have trustees acting as their representatives to bring about the sale, which normally takes place as a public auction. In accordance to the rules in Montana, not everybody can act as a trustee, this list of people who can act as trustees limits to title agents, banks and attorneys. Being a non-judicial method, this process has in place very strict requirements for notices, and requires the legal loan documents to have a power of sale clause for this method of foreclosure to be used.
Before the sale of a foreclosure is initiated, a notice of sale has to be recorded by the lender at the county clerk’s office in the county where the property is situated, within a 120 day period of the planned sale. The same notice must be served by registered or certified mail to the borrower, and must be posted at the property in question and served personally to the borrower no later than twenty days prior to the sale.
The above mentioned notice of sale has to have within it information that includes the default’s description, the trust indenture and recorded book’s identification by lenders, the fees and the costs covering the foreclosure, and the sale’s place and time. The loan can be paid off in full any time before the sale takes place. Also, the publication of the notice in a newspaper that is approved for carrying legal notices within the same county for a period of three weeks, once each week, is required.
Sales of foreclosures have to take place in between 09:00am and 04:00pm at either the county court within the county where the property is situated, or at the usual business place of the trustee, as far as it is located within the same county. The property then sells to the party who places the highest bid.
A judicial foreclosure process may also be followed by lenders in Montana where a lender has to go through a court which in turn announces the foreclosure’s final verdict. In cases where the power of sale clause is absent from deeds of trust, lenders have to pursue judicial foreclosure. The property then sells at a publicly notified sale. A complaint in conjunction with a lis pendens (a document that is recorded to provide a notice to the public about the property in foreclosure) needs to be filed in the court.
The legal documents are referred to as a trust indenture, and a security agreement in cases of commercial transactions. These are both merged from time to time. The filing of a mortgage can also be done to validate the loan in question and its repayment terms, which find a mention in the note.
It can take about 140 to 150 days, with the time required for various notices taken into consideration, for a foreclosure that is not contested to get into effect. If bankruptcy is filed for by the borrower, or if the action is contested and the sale is sought to be postponed, there can be a delay in the process. A majority of the delays in sales of foreclosures are in relation to interested parties, junior lien holders and government agencies not being properly served. The complexity to find and serve these parties does delay the process.
Non-judicial foreclosures in Montana do not have a statutory right of redemption post the foreclosure sale.
Usually, if a foreclosure property sells for lesser than the amount which is secured by the deed of trust or mortgage in question at the public-sale, a deficiency judgment cannot be acquired through the non-judicial process to foreclose.
Foreclosures in Montana in relation to trust indentures are governed by laws that are part of the Montana Code Annotated (2003) Section 71-1-301 et. seq. Mortgage foreclosures are governed by laws that are part of the Montana Code Annotated (2003) Section 71-1-101 et. seq.
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