Foreclosure Laws in Montana
Montana homeowners who are facing foreclosure or who are concerned about the possibility of foreclosure should understand their rights under the state's foreclosure laws. A typical Montana foreclosure takes approximately 150 days. The foreclosure can be delayed, depending on the type of preventative action the homeowner seeks. Both judicial and nonjudicial foreclosures occur in Montana, although nonjudicial are more common.
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Preforeclosure Period
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Before a foreclosure, homeowners have an opportunity to negotiate with the lender to prevent foreclosure. Various options are available to struggling Montana homeowners. HUD-approved foreclosure prevention counselors are located throughout Montana. A counselor can guide you through the foreclosure process, review loan details, discuss alternative methods, advocate with the lender and help you apply for assistance. Homeowners have until the sale date to stop the foreclosure. There is no redemption period in Montana.
Judicial Foreclosures
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If the deed of trust does not contain a power-of-sale clause, the lender must foreclosure through the court. In a judicial foreclosure, the lender files a lawsuit against the homeowner. The homeowner will receive a Notice of Intent to Foreclosure from the lender before the foreclosure process is initiated. If the homeowner fails to pay the past-due balance, action will continue. The Notice of Complaint is filed through the court, along with a lis pendes. A lis pendes means "pending legal action." The homeowner will need to respond to the Notice of Complaint within 20 days. The Montana court determines the debt amount and specifies the time frame in which a borrower has to pay it. If the homeowner does not pay the debt in time, the court issues a Notice of Sale.
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Nonjudicial Foreclosures
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An out-of-court, or nonjudicial, foreclosure, begins when the lender records a Notice of Sale with the local county recorder. Within 120 days of filing, the foreclosure auction will occur. Unless specified in the mortgage deed, the lender is not required to send the homeowner a Notice of Sale. The sale is advertised in a public place, and details are published once a week for three consecutive weeks in the local newspaper. The borrower can stop the foreclosure any time before the sale occurs by paying the delinquent balance, plus associated fees.
Foreclosure Auction
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In Montana, the foreclosure notice must be posted on the property itself 20 days prior to the auction. The notice contains the time, date and location of the sale, the borrower's, lender's and trustee's names and a description of property. A trustee is in charge of the foreclosure sale through an auction open to the public. The trustee is required to conduct the auction between the hours of 9:00 a.m. and 4:00 p.m. All auctions are held at the courthouse in the county where the property is located. The opening bid is usually equal to the amount remaining on the loan. In Montana, a sale can be postponed for up to 15 days.
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