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Montana · ForeclosureMontana deficiency judgments: none after a trust indenture is foreclosed by trustee's sale

A Montana home loan may be secured by a trust indenture under the Small Tract Financing Act, and that act decides what happens if the trustee's sale brings less than the debt. When a trust indenture executed in conformity with that part is foreclosed by advertisement and sale, no other or further action, suit or proceeding may be taken, and no judgment entered, for any deficiency against the grantor or the grantor's surety, guarantor or successor in interest on the note, bond or other obligation it secures, or against any other person obligated on that obligation (MCA 71-1-317). The protection is tied to foreclosure by advertisement and sale; a lender that forecloses the trust indenture judicially as a mortgage is outside this section.

What the statutes set

  1. No deficiency (MCA 71-1-317)

    After foreclosure of a trust indenture by advertisement and sale.

  2. Who is protected (MCA 71-1-317)

    The grantor, surety, guarantor, successor and anyone obligated on the note.

  3. Scope (MCA 71-1-317)

    Applies to foreclosure by advertisement and sale.

What the TC does on a Montana short sale or a sale after foreclosure

  • On a short sale, get the lender's approval letter and note whether it waives any deficiency.
  • On a purchase of foreclosed property, track the deed from the sale and any court order confirming it.
  • Keep the deficiency question with the seller's attorney – it is not part of the buyer's closing.

Questions about Montana deficiency judgments

Can a Montana lender get a deficiency after a trustee's sale?

No. After a trust indenture is foreclosed by advertisement and sale, no judgment for a deficiency may be entered against the grantor or anyone obligated on the note (MCA 71-1-317).

Does the Montana rule protect a guarantor?

Yes. It bars deficiency claims against the grantor's surety and guarantor as well as any other person obligated on the secured obligation (MCA 71-1-317).

Related guides

Track a short sale approval letter and any lender conditions as tasks on the deal in ClosingCode.

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Source: MCA 71-1-317 (leg.mt.gov, MCA 2025), read October 31, 2026.

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.