If you fall far enough behind on your mortgage payments and you live in Mississippi, you might lose your home to a foreclosure. But you might not even be aware that your house is up for auction at a foreclosure sale because Mississippi law doesn’t require the bank to send you a personal notification. Instead, state law requires the bank to publish the foreclosure sale date in the newspaper and post a notice at the courthouse.
So, if you're facing a foreclosure in Mississippi, it’s important to understand some of the basics, including:
Below we've outlined some of the most important features of Mississippi’s foreclosure laws. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do's and Don'ts).
In Mississippi, the bank can use one of two different processes to foreclose:
Most banks choose the fast, easy, and inexpensive nonjudicial process.
Once the 120-day waiting period that federal law generally requires ends, the bank will start a foreclosure using the process described in the Mississippi statutes. The process is quite different than in many other states. Here’s how it works: The foreclosing bank must publish a notice of sale for three consecutive weeks before the sale date and post notice on the courthouse door. That's it. Then the bank may then sell the home at a foreclosure sale. (Miss. Code Ann. § 89-1-55).
While state law doesn’t require the bank to send a notice to the borrower, most deeds of trust require a 30-day notice about the default prior to acceleration. (An “acceleration clause” in the deed of trust permits the bank to demand that the entire balance of the loan be repaid if the borrower defaults on the loan.) And many banks will voluntarily send a 30-day notice before initiating the foreclosure, even if the terms of the deed of trust don’t require it.
Also, in most cases, federal law requires the bank to contact the borrower by phone and in writing to provide information about ways to avoid a foreclosure before the process officially starts.
Under Mississippi law, the borrower may reinstate the loan (get current) at any time before the sale. (Miss. Code Ann. § 89-1-59).
In some states, the borrower can get the home back after a foreclosure sale by redeeming it. In Mississippi, however, the borrower doesn't get a post-sale right of redemption.
When the borrower’s total mortgage debt—the entire outstanding principal, plus interest, fees, and costs—is more than the foreclosure sale price, the difference is called a “deficiency.” Some states allow the foreclosing bank to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount. Other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Mississippi, deficiency judgments are allowed if the foreclosing bank 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 fair market value of the property, particularly if the bank is the high bidder. (In most cases, the bank is the high bidder at the foreclosure sale. The property then becomes what’s called “Real Estate Owned” or REO.)
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.)
To qualify for the moratorium, borrowers must meet certain requirements including:
But Mississippi’s moratorium law does not 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.)
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, 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.)
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, 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.
If you're facing a foreclosure in Mississippi and want to learn more about the process, including your rights and whether you have any defenses, consider talking to a lawyer. To get information about loss mitigation options, speak 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.