I want to open the main folder containing all files (1), search though the files and only grab any .txt file with \"mtn\" in the title (2), print a the list of txt files (3)
The mode string 'w+'
causes any existing contents to be truncated. Perhaps see further python open built-in function: difference between modes a, a+, w, w+, and r+?
You don't want to repeatedly open and close the same file anyway; just open it once outside the main loop, and then write whenever you have something more to write.
(Switching to 'a'
instead of 'w+'
would fix your code with a minimal change; but you then cause the operating system to do a fair amount of gymnastics to open the file, seek to the end, and close it again for every line you want to write.)