AN ACT CLARIFYING THE TYPES OF ACTS OR PROCEEDINGS THAT ARE NOT PROHIBITED BY THE ONE-ACTION LIMITATION IN FORECLOSURE SUITS; AND AMENDING SECTION 71-1-222, MCA.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 71-1-222, MCA, is amended to read:

"71-1-222. Proceedings in foreclosure suits. (1) 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.

(2) If it appears from the sheriff's return that the proceeds are insufficient and a balance still remains due, judgment can then be docketed for the balance against the defendant or defendants personally liable for the debt, and it becomes a lien upon the real estate of the judgment debtor, as in other cases on which execution may be issued.

(3) A person holding a conveyance from or under the mortgagor of the property mortgaged or having a lien on the property, which conveyance or lien does not appear of record in the proper office at the time of the commencement of the action, does not have to be made a party to the action. The judgment and the proceedings are as conclusive against the party holding the unrecorded conveyance or lien as if the holding party had been made a party to the action.

(4) The one-action limitation in this section does not prohibit an act or proceeding:

(a) to appoint a receiver for or obtain possession of real or personal property collateral for the debt or other obligation;

(b) to enforce a security interest in or the assignment of any rents, issues, profits, or other income of any real or personal property;

(c) to enforce a mortgage or other lien on real or personal property collateral located outside this state that is security for the same debt or other right secured by real property in this state;

(d) to secure a judgment outside this state on a debt or other right secured by real property in this state and by real or personal property collateral located outside this state;

(e) for the exercise of a power of sale conferred pursuant to the provisions of 71-1-223 or a foreclosure by advertisement and sale pursuant to Title 71, chapter 1, part 3;

(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;

(g) for the exercise of a right or remedy under the uniform commercial code of another state;

(h) for claim and delivery of personal property pursuant to the provisions of Title 27, chapter 17;

(i) for the exercise of a right to set off a deposit or share account, to enforce a pledge in a deposit or share account pursuant to a written agreement or pledge, or to enforce a financial institution's statutory lien;

(j) to draw under a letter of credit;

(k) for the recovery of damages arising from the commission of a tort or the recovery of any declaratory or equitable relief;

(l) to collect a debt or enforce a right or obligation secured by a junior mortgage or other junior lien on real property if the property has been sold to satisfy, in whole or in part, a debt or other right or obligation secured by a senior mortgage or other senior lien on the property;

(m) concerning a mortgage securing a debt or right guaranteed, to enforce an agreement with a surety or guarantor of the debt or right secured by a mortgage on real estate, if the surety or guaranty obligation is not secured by the same mortgage;

(n) relating to a proceeding in bankruptcy, including filing a proof of claim, to seek relief from an automatic stay and any other action to determine the amount or validity of a debt or right or obligation secured by a mortgage;

(o) for filing a claim or to enforce a claim disallowed pursuant to the Montana Uniform Probate Code;

(p) that does not include collection of the debt or realization of the collateral securing the debt or other obligation;

(q) that is exempted from the provisions of this section by law;

(r) to recover costs of suit, costs and expenses of sale, attorney fees, and other incidental relief in connection with any act or proceeding authorized in this subsection (4); or

(s) for recovery of a debt or for enforcement of a right secured by a mortgage when the mortgage security in this state has become valueless through no fault of the mortgagee."

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I hereby certify that the within bill,

SB 0232, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 232

INTRODUCED BY B. DEPRATU, S. KITZENBERG, W. MCNUTT, S. ANDERSON

AN ACT CLARIFYING THE TYPES OF ACTS OR PROCEEDINGS THAT ARE NOT PROHIBITED BY THE ONE-ACTION LIMITATION IN FORECLOSURE SUITS; AND AMENDING SECTION 71-1-222, MCA.