Mississippi Foreclosure Laws and Procedures

Learn about Mississippi foreclosure laws.

By , Attorney University of Denver Sturm College of Law
Updated 11/08/2023

Before the foreclosure crisis, federal and state laws regulating mortgage servicers and foreclosure procedures were relatively limited and tended to favor foreclosing lenders. However, many federal and state laws now give protections to borrowers. Servicers generally must provide borrowers with loss mitigation opportunities, account for each foreclosure step, and carefully comply with foreclosure laws.

Also, most people who take out a loan to buy a residential property in Mississippi sign a promissory note and a deed of trust, which is like a mortgage. These documents usually give homeowners certain contractual rights after a home loan default.

So, don't get caught off guard if you're a homeowner behind in mortgage payments. Learn about foreclosure laws in Mississippi and how the Mississippi foreclosure process works, from missing your first payment to a foreclosure sale.

What Are My Rights During Foreclosure in Mississippi?

In a Mississippi foreclosure, you'll most likely get the right to:

  • receive a breach letter
  • apply for loss mitigation
  • get current on the loan and stop the foreclosure sale
  • receive special protections if you're in the military
  • pay off the loan to prevent a sale, and
  • get any excess money after a foreclosure sale.

Once you understand the Mississippi foreclosure process and your rights, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

What Is Preforeclosure?

The period after you fall behind in payments, but before a foreclosure officially starts, is generally called the "preforeclosure" stage. (Sometimes, people refer to the period before a foreclosure sale happens as "preforeclosure," too.)

During the preforeclosure period, the servicer can charge you various fees. Also, in most cases, federal law requires the servicer to let you know how to avoid foreclosure, and most mortgage contracts require the servicer to send you a breach letter.

When Can a Foreclosure in Mississippi Start?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41). This 120-day period provides most homeowners ample opportunity to submit a loss mitigation application to the servicer.

What Are the Different Types of Foreclosure in Mississippi?

If you default on your mortgage payments in Mississippi, the lender may foreclose using a judicial or nonjudicial method.

How Judicial Foreclosures Work

A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. If you don't respond with a written answer, the lender will automatically win the case.

But if you choose to defend the foreclosure lawsuit, the court will review the evidence and determine the winner. If the lender wins, the judge will enter a judgment and order your home sold at auction.

How Nonjudicial Foreclosures Work

If the lender chooses a nonjudicial foreclosure, it must complete the out-of-court procedures described in the state statutes. After completing the required steps, the lender can sell the home at a foreclosure sale.

Most lenders opt for the nonjudicial process because it's quicker and cheaper than litigating the matter in court.

How Does the Nonjudicial Foreclosure Process in Mississippi Work?

Again, most residential foreclosures in Mississippi are nonjudicial. Once the 120-day waiting period that federal law generally requires ends, the lender will start a foreclosure using the process described in the Mississippi statutes. The process is quite different than in many other states.

Nonjudicial Foreclosure Requirements in Mississippi

The foreclosing lender must publish a notice of sale for three consecutive weeks before the sale date and post notice on the courthouse door. That's it. The lender may then sell the home at a foreclosure sale. (Miss. Code Ann. § 89-1-55).

While state law doesn't require the lender to send a notice to the borrower, again, most deeds of trust require a 30-day notice about the default (a breach letter) before accelerating the loan. And many lenders will voluntarily send a 30-day notice before initiating the foreclosure, even if the terms of the deed of trust don't require it.

How Do Foreclosure Sales in Mississippi Work?

At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less.

In some states, including Mississippi, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower. The property becomes "Real Estate Owned" (REO) if the lender is the highest bidder.

But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds—that is, money over and above what's needed to pay off all the liens on your property—you're entitled to that surplus money.

How Long Do You Have to Move Out After Foreclosure in Mississippi?

After the nonjudicial foreclosure is complete, the person or entity that bought the property at the foreclosure sale may begin the eviction process, usually after making a demand for possession.

What Are the Options Available for Borrowers During Foreclosure in Mississippi?

A few potential ways to stop a foreclosure and keep your home include reinstating the loan, redeeming the property before the sale, or filing for bankruptcy. Working out a loss mitigation option, like a loan modification, will also stop a foreclosure.

Or you might be able to work out a short sale or deed in lieu of foreclosure and avoid foreclosure. (But you'll have to give up your home with a short sale or deed in lieu of foreclosure transaction.)

Reinstating the Loan

Under Mississippi law, you may reinstate the loan any time before the sale. (Miss. Code Ann. § 89-1-59).

Redeeming the Property

One way to stop a foreclosure is by "redeeming" the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale.

Some states also provide foreclosed borrowers with a redemption period after the foreclosure sale, during which they can buy back the home. Mississippi law, however, doesn't provide a post-sale redemption period after a nonjudicial foreclosure.

Filing for Bankruptcy

If you're facing a foreclosure, filing for bankruptcy might help. In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy.

Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction, which prohibits the lender from foreclosing on your home or otherwise trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. Or, if you want to save your home, filing for Chapter 13 bankruptcy might be the answer. To find out about the options available, speak with a local bankruptcy attorney.

Foreclosure Protections and Military Servicemembers

The Servicemembers Civil Relief Act provides legal protections to military personnel facing foreclosure.

Are Deficiency Judgments Allowed in Mississippi?

In a foreclosure, the borrower's total mortgage debt sometimes exceeds the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed is $400,000, but the home sells for $350,000 at the foreclosure sale. The deficiency is $50,000.

In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount—in our example, $50,000—from the borrower.

Mississippi law allows deficiency judgments.

Mississippi Deficiency Judgment Laws

In Mississippi, deficiency judgments are allowed if the lender files a separate lawsuit within one year after the foreclosure sale. (Miss. Code Ann. § 15-1-23). To get a deficiency judgment, the winning bid at the foreclosure sale must be reasonable based on the property's fair market value, particularly if the lender is the high bidder.

What Are the Potential Consequences of Foreclosure?

A foreclosure could result in serious consequences, like lower credit scores, a deficiency judgment (as mentioned), or tax ramifications.

Mississippi Law Provides Foreclosure Protections After a Natural Disaster

In the wake of a natural disaster—like a hurricane, flood, or severe thunderstorm—Mississippi law can provide foreclosure protections to homeowners who meet specific criteria. Under the law, 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, § 89-1-329).

Eligibility for a Moratorium

To qualify for the moratorium, borrowers must meet specific requirements, including:

  • showing that the natural disaster directly damaged the home and that the damage was not due to some other reason
  • proving that they're unable to pay the debt
  • demonstrating that they've made diligent efforts to refinance the debt and
  • showing the property's value was reduced by 15% or that they've sustained a loss in income derived from the mortgaged property, or are presently threatened with such loss as a direct result of such disaster, in an amount in excess of 15% of the average annual income from the mortgaged property for the three years immediately before the disaster. (Miss. Code Ann. § 89-1-301).

But Mississippi's moratorium law doesn't apply to some kinds of loans, like 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).

How to Get Relief

To take advantage of foreclosure relief under state law, you must take specific actions, including filing a petition in court to get an injunction prohibiting the foreclosure. 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.

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. (Miss. Code Ann. § 89-1-303).

Other Forms of Mortgage Relief After a Natural Disaster

If you don't qualify for a moratorium under state law after a natural disaster, you might be eligible for a foreclosure delay if you have an FHA-insured, Fannie Mae, Freddie Mac, or VA-guaranteed 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 More Articles

Get tips on what to do—and what not to do—if you're facing a foreclosure.

Find out if foreclosures are on the rise.

More Foreclosure Information

For more information on federal mortgage servicing laws and foreclosure relief options, go to the Consumer Financial Protection Bureau (CFPB) website.

Getting Help

In this article, you'll find details on foreclosure laws in Mississippi with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply laws can change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you're facing a foreclosure.

If you have questions about Mississippi's foreclosure process or want to learn about potential defenses to a foreclosure and possibly fight the foreclosure in court, consider talking to a foreclosure attorney. Talking to a HUD-approved housing counselor about different loss mitigation options is also a good idea.

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