If you’re facing a foreclosure in Mississippi, it’s a good idea to get as much information as possible about the process—especially information about how long the foreclosure will probably take. Most homeowners are entitled to a 120-day preforeclosure period under federal law. But once this period expires, all the foreclosing bank typically must do before selling the house is publish a notice of sale and post notice on the courthouse door.
In this article, you’ll learn about foreclosure procedures in Mississippi, including your rights during and after the process.
Under federal law, in most cases, a loan servicer must wait until you're over 120 days' delinquent before officially starting the foreclosure process. (12 C.F.R. § 1024.41). This preforeclosure period is an excellent time to submit an application to your servicer asking for an alternative to foreclosure. You might be able to stay in your home by working out a repayment plan or modification, for example, or give it up without going through a foreclosure in a short sale or deed in lieu of foreclosure.
Federal law also provides other protections to homeowners facing a foreclosure, like prohibiting servicers from dual tracking.
Mississippi law allows both judicial foreclosures, which go through the court system, and nonjudicial foreclosures, which take place out of court. Because most foreclosures in Mississippi are nonjudicial, this article focuses on that process.
In Mississippi, the foreclosing bank has to publish notice of the foreclosure sale in a newspaper for three consecutive weeks before the sale. The notice must also be posted on the courthouse door. (Miss. Code Ann. § 89-1-55).
Mississippi law doesn’t require the foreclosing bank to notify the borrower directly about the foreclosure. But most deeds of trust require the bank to send a breach letter before accelerating the loan. The bank can’t foreclose until after acceleration. (The acceleration clause in the loan contract permits the bank to demand that the entire balance of the loan be repaid if the borrower defaults on the loan.)
“Reinstating” is when the borrower gets current on the defaulted loan by paying the missed payments, plus fees and costs. Completing a reinstatement will stop a foreclosure.
Under Mississippi law, the borrower may reinstate at any time before the sale by getting caught up on the past-due payments (principal and interest), plus certain fees and costs. (Miss. Code Ann. § 89-1-59).
In some states, the borrower gets the right under state law to redeem the home within a specific amount of time after the foreclosure. Mississippi law, though, doesn’t provide foreclosed homeowners with a right of redemption after the sale.
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the foreclosing bank to seek a personal judgment, which is called a “deficiency judgment,” against the borrower for this amount. Other states prohibit deficiency judgments with what are called anti-deficiency laws.
Mississippi doesn't have an anti-deficiency law. The foreclosing party can get a deficiency judgment after a nonjudicial foreclosure by filing a lawsuit against the borrower within one year after the foreclosure sale date. (Miss. Code Ann. § 15-1-23).
To get a deficiency judgment, the bank's winning bid at the foreclosure sale must be reasonable based on the fair market value of the property. (Usually, the bank is the high bidder at the foreclosure sale and becomes the new owner of the property.)
Once a nonjudicial foreclosure in Mississippi is complete, the purchaser that bought the property at the foreclosure sale may begin the eviction process, usually after making a demand for possession.
If you want to learn more about the foreclosure process in Mississippi or want to find out if you have any potential defenses to a foreclosure, consider talking to a lawyer. Make an appointment to speak to a HUD-approved housing counselor if you want to learn about different loss mitigation options or if you need help preparing your loss mitigation application.