A Montana borrower defaulted on a deed of trust in January. The lender recorded a Notice of Trustee's Sale and set the sale for April. In March, the borrower came into funds and wants to stop the foreclosure. The borrower's attorney advises that the borrower can reinstate the loan before the April sale date. However, the borrower's neighbor — who defaulted on a judicial mortgage foreclosure in another state — tells the borrower that even after the sale, there is a redemption period to get the property back. Which statement correctly applies Montana law to this situation?
Correct Answer
C) The attorney is correct; the borrower can reinstate before the sale, but once the trustee's sale occurs, there is no statutory post-sale redemption right under Montana's Trust Indenture Act.
The attorney is correctly applying Montana law. Under the Montana Trust Indenture Act (MCA Title 71, Chapter 1, Part 3), a borrower has the right to reinstate a defaulted deed of trust by paying all past-due amounts, fees, and costs before the trustee's sale date. However, once the trustee's sale is completed, Montana law provides NO statutory post-sale redemption period for non-judicial deed of trust foreclosures. The neighbor's experience from another state involving a judicial mortgage foreclosure does not apply in Montana. This is one of the most important Montana-specific distinctions in real estate finance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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