Most foreclosures in Montana are done outside the court process. Generally deficiency judgments are not allowed in cases of non-judicial foreclosures. However, in cases of judicial foreclosures the courts allow deficiency judgments for purchase money mortgages.
Current Laws
71-1-222. Proceedings in foreclosure suits.
There is only one action for the recovery of debt or the enforcement of any right secured by a mortgage upon real estate, and that action must be in accordance with the provisions of this part. In the action, the court may, by its judgment, direct:
(a) a sale of the encumbered property or as much of the property as may be necessary;
(b) the application of the proceeds of the sale, including the payment of property taxes due at the time of foreclosure; and
(c) the payment of the costs of the court, the expenses of the sale, and the amount due the plaintiff.
The one-action limitation in this section does not prohibit an act or proceeding (f) for the exercise of a right or remedy under the Montana Uniform Commercial Code, except securing a judgment on a secured debt, including a deficiency judgment on a secured debt, in a court in Montana
71-1-232. Deficiency judgment not allowed on foreclosure of purchase price mortgage.
Upon the foreclosure of any mortgage, executed to any vendor of real property or to the vendor's heirs, executors, administrators, or assigns for the balance of the purchase price of the real property, the mortgagee is not entitled to a deficiency judgment on account of the mortgage or note or obligation secured by the mortgage.
71-1-317. Deficiency judgment not allowed.
When a trust indenture executed in conformity with this part is foreclosed by advertisement and sale, other or further action, suit, or proceedings may not be taken or judgment entered for any deficiency against the grantor or the grantor's surety, guarantor, or successor in interest, if any, on the note, bond, or other obligation secured by the trust indenture or against any other person obligated on the note, bond, or other obligation.
7-15-4532. Limitations on remedies of obligees.
The provisions of this section shall not apply to or limit the right of obligees to foreclose any mortgage of the authority provided for in 7-15-4526 and, in case of a foreclosure sale thereunder, to obtain a judgment or decree for any deficiency due on the indebtedness secured thereby and issued on the credit of the authority. Such deficiency judgment or decree shall be a lien and charge upon the property of the authority which may be levied on and sold by virtue of an execution or other judicial process for the purpose of satisfying such deficiency judgment or decree.
Talk with an Attorney
In the case of deficiency judgments, Montana laws generally do not allow these judgments except where the foreclosure of collateral is done in the courts. In some cases, a deficiency judgment will serve as a subsequent lien on the property. Talk with an experienced foreclosure attorney to discuss the details of your case.
