When a debtor decides to stop making payments, the mortgage company or the lender may take ownership of the asset or property used as collateral and sell it as means of recovering the remaining balance. This legal process is called foreclosure. Most foreclosure cases are considered non-judicial. There are foreclosure procedures and guidelines that vary from state-to-state. In Mississippi, the state law provides you protection and rights as you undergo the foreclosure process.
If you apply for a mortgage loan in Mississippi, you are required to fill out and sign a promissory note and a deed of trust. A credible Jackson bankruptcy attorney can help you devise the required paperwork. A promissory note is a written document that affirms your intention to voluntarily pay back the total loan amount under the terms and conditions of the repayment plan. The deed of trust is another supporting document that grants the mortgage lender a security interest in the mortgaged property with an inclusion of a power of sale clause. This clause allows the lender to have authority to sell your assets used as collateral non-judicially. The proceedings of the foreclosure sale will be used as compensation if you fail to repay what you owed.
A mortgage loan due amount must be paid on time to avoid penalties. Late charges may apply if you failed to pay off the monthly bills within the period specified in your promissory note. If you failed to settle consecutive monthly payments, the debt collector or mortgage servicer will contact you through written letters or phone calls to remind you of your past-due. You will be notified through a phone call within 36 days from your missed due date, and repeat within the same period following every missed payment date, to discuss the “loss mitigation” alternatives. These are the possible options to prevent foreclosure. The servicer will inform you in writing regarding the available “loss mitigation” alternatives in no more than 45 days after your missed due date.
In Mississippi, the deed of trust includes a stipulation that mandates the lender or creditor to send you a breach letter once you fail to settle your mortgage payment on time. This notification indicates that the status of your loan is at default. If there will be no necessary actions to be taken, then the lender has the power to proceed with foreclosure.
Under the federal foreclosure law, the foreclosure shall start once the loan is delinquent for more than 120 days. In case you violate any due-on-sale article or if the loan servicer is participating in the foreclosure action plan of a lienholder, then it may start earlier than the expected period.
There are certain foreclosure state laws and guidelines that you need to follow. In Mississippi, a foreclosure notice shall be published by the lender in the newspaper and the courthouse within three weeks before the sale of the property. The law does not necessarily oblige the creditor to directly inform you about the foreclosure; however, the deed of trust requires the designated bank to notify you by sending the breach letter before the acceleration of the loan which is required before foreclosure.
Foreclosure laws and statutes may be subject to change. You need to be updated with any possible modification in the laws with the legal help of a reliable Jackson bankruptcy lawyer.
The foreclosure property sale begins with the opening of the foreclosure auction to bidders. Lenders bid on the auctioned assets using the “credit bid” instead of using cash. The credit bid allows the lender to obtain the credit amount similar to the debt amount of the borrower. The person with the highest bid will be acknowledged as the new rightful property owner. The newly recognized owner has the right to initiate forced eviction once the foreclosure has been finalized. You need to give up your homeownership rights and move out as soon as possible due to foreclosure.
There are some instances wherein the selling price of the property is lower than the total debts of the borrower. This variance is called a “deficiency balance”. Most of the states permit the creditor to have a personal judgment or “deficiency judgment” to be filed against the debtor. This can be done after the non-judicial foreclosure through a lawsuit to be filed against the borrower within one year from the sale date.
In other states, the borrowers are given a certain time to redeem a foreclosed property. On the contrary, Mississippi laws do not give the right of redemption after the foreclosure. The borrower may have the right to stop the non-judicial foreclosure when you “reinstate” the loan, as long as the total overdue amount (including interest and fees) will be paid off.
If you are facing foreclosure, it might be possible to prevent it through filing for bankruptcy, loan modification, or lawsuit filing. There are possible alternative solutions to avoid foreclosure of your mortgaged property.
The foreclosure process can be lengthy and complex. It may cause you financial hardship and difficulty in getting back on track. You need to be knowledgeable enough about the foreclosure laws that you need to strictly follow. Call our experienced Jackson bankruptcy attorneys at Rollins Law Firm so we can provide you the legal help that you need to stop foreclosure. We will guide you throughout the process and save your assets from any foreclosures.
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