Avoid Foreclosure After a Natural Disaster Under Mississippi Law

If you live in Mississippi and are facing foreclosure after a hurricane, flash flood, or other natural disaster, you might qualify for foreclosure relief.

In the wake of a natural disaster—like a hurricane, flood, or severe thunderstorm—Mississippi law provides foreclosure protections to homeowners who meet certain criteria. Under the law, you might be entitled to a moratorium, which means the lender has to delay a foreclosure for a specific time period.

If you don’t qualify for a moratorium under state law, you might be eligible for a foreclosure delay if you have an FHA, Fannie Mae, Freddie Mac, or VA loan. Also, the Federal Emergency Management Agency (FEMA) provides financial assistance to federally-declared disaster areas, and the U.S. Small Business Administration (SBA) offers loans to individuals and businesses in declared disaster areas.

Read on to learn more about the potential types of foreclosure relief available if you live in Mississippi and have been affected by a natural disaster.

Foreclosure Moratorium Law in Mississippi

In Mississippi, the governor can declare a natural disaster and impose a moratorium on foreclosures for up to two years. (Miss. Code Ann. § 89-1-301, § 89-1-303.) (To learn about foreclosure procedures in Mississippi, see our Summary of Mississippi’s Foreclosure Laws.)

Eligibility criteria. To qualify for the moratorium, borrowers must:

  • show that the natural disaster directly damaged the home and that the damage was not due to some other reason
  • prove that they’re unable to pay the debt
  • demonstrate that they’ve made diligent efforts to refinance the debt, and
  • prove the property’s value was reduced by 15%, like by providing photos (if the damage is obvious) or completing an appraisal. (Miss. Code Ann. § 89-1-301.)

Also, even if a moratorium is granted, the court might require you to pay a monthly amount for taxes, insurance, interest, and, in some cases, other monthly charges.

Once the moratorium ends, the foreclosure continues. At the end of the moratorium period, the borrower must pay all past-due amounts to stop the lender from pursuing a foreclosure at that time. To catch up on the past-due debt, borrowers may turn to different sources, like:

The foreclosure moratorium law does not cover all loans. Mississippi’s moratorium law does not apply to mortgages held by the United States or any agency of the United States, nor mortgages held as security for a public debt, for example. (Miss. Code Ann. § 89-1-323.)

Help for Homeowners With Various Types of Loans

If the governor doesn’t declare a moratorium after a natural disaster or you don’t qualify for one under Mississippi law, you might qualify for a moratorium or other type of relief—like a modification or forbearance—if you have an FHA, Fannie Mae, Freddie Mac, or VA loan. (To learn more, see Help for Homeowners Facing Foreclosure After a Natural Disaster.)

If you have another type of loan, most mortgage lenders and servicers provide relief from foreclosure by offering flexible loss mitigation (foreclosure avoidance) options to borrowers following a natural disaster.

Other Relief for Disaster Victims: FEMA, SBA Loans

The Federal Emergency Management Agency (FEMA) provides different kinds of assistance, like public assistance and individual assistance, to federally-declared disaster areas. (Go to FEMA.gov for more information.)

Also, the U.S. Small Business Administration (SBA) has special loan programs to help individuals and businesses after a natural disaster. Much of the disaster assistance from the federal government is in the form of loans that the SBA administers. (Learn more about Getting an SBA Loan After a Natural Disaster.)

Getting Help

Mississippi’s moratorium law is complicated. To take advantage of foreclosure relief under state law, you have to take specific actions, including filing a petition in court to get an injunction prohibiting the foreclosure. Also, keep in mind that you might have other available defenses to a foreclosure. If you want to invoke foreclosure protections under Mississippi’s moratorium law or have other questions about other potential foreclosure defenses in Mississippi, consult with a local foreclosure attorney.

If you want to learn more about different ways to avoid a foreclosure, like by getting a modification, consider talking to a HUD-approved housing counselor. Be aware that, once started, foreclosures in Mississippi move very quickly. You should explore ways to avoid foreclosure as soon as you miss a payment or think you might fall behind.

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