If you are a farmer facing foreclosure, you want to know whether there is anything you can do to save your farm. Here, lenders can foreclose through both a judicial or non-judicial foreclosure process. Most foreclosures in Montana are non-judicial, which means they do not go through the court system. Instead, the lender follows a set of procedures specified by state law and the loan contract.
Loss mitigation is a term that refers to alternatives to foreclosure, such as loan modification, forbearance, repayment plan, short sale or deed in lieu of foreclosure. These options can help you lower your payments, catch up on your arrears or get out of your loan without foreclosure. To apply, you need to contact your lender or servicer and submit an application with supporting documents. You might also qualify for some federal or state programs that provide assistance to homeowners affected by hardships.
Reinstatement means paying off all the past-due amounts, fees and costs to bring your loan current and stop the foreclosure. In our state, you have the right to reinstate your loan at any time before 5 days prior to the date of sale if your deed of trust is under the Small Tract Financing Act. If not, you need to check your contract to see if you have a reinstatement right and how long it lasts.
Redemption means paying off the loan, plus interest and costs, to get your property back after the foreclosure sale. In Montana, there is no right of redemption after a non-judicial foreclosure sale. However, if your lender forecloses judicially, you have 1 year after the sale to redeem your property.
File for bankruptcy
If you file for bankruptcy before the foreclosure sale, you can stop the sale temporarily or permanently, depending on the type of bankruptcy. Chapter 7 bankruptcy can wipe out your unsecured debts, like credit cards and medical bills, but it will not eliminate your mortgage. However, it can buy you some time to work out a solution with your lender or find another place to live. Chapter 13 bankruptcy can help you keep your property by letting you pay off your arrears over 3 to 5 years.
Challenge the foreclosure in court
If you believe that your lender or servicer has violated any federal or state laws or made any errors in the foreclosure process, you might be able to challenge the foreclosure in court. For example, you might have a defense if your lender or servicer failed to send you proper notices, evaluate you for loss mitigation, account for your payments correctly or prove its ownership of the loan.