What You Need to Know
Our clients often ask, “can my mortgage lender take my house without even filing a court case?” Surprisingly, yes. Creditor friendly laws in Mississippi make it possible for a mortgage lender to foreclose your home by simply mailing you a letter. This form of foreclosure is called “Power of Sale,” and it makes taking possession of your home extremely easy for banks and mortgage companies. Believe it or not, mortgage loan documents usually contain an authorization for your lender to conduct a Power of Sale foreclosure when you fall behind. Surprised? Remember that large stack of papers you had to sign at your loan closing? It’s in the fine print of course.How It all Starts
The first sign of a foreclosure is typically a Demand Letter from your lender stating that you are behind a certain amount and demanding payment in full of that delinquency. If you fail to respond to that Demand Letter within a specified amount of time (usually 30 days), your lender will then contact their attorneys to initiate a foreclosure. Next, you will usually receive a second Demand Letter from the foreclosure attorneys. That letter will typically provide a statement of your delinquency and demand payment within a certain period of time. This letter will warn that unless your past-due balance AND any attorney’s fees and late fees are not paid, the attorneys will initiate foreclosure.What to Look Out for
Your lender’s attorneys must next publish a Notice of Sale in your local newspaper which announces the exact date your home will be sold on the courthouse steps. Look Out! Your lender is NOT required to mail that notice to you. So, although you could read the legal notices in all local newspapers every day to find out when your home will be sold, we recommend that you take action immediately upon receiving the Demand Letter from your lender and/or from their attorneys.What You can do to Stop Foreclosure
Most mortgage borrowers are not aware that they have to legal right to reinstate their loan and stop foreclosure all the way up to the time of the foreclosure sale. However, in the event you cannot bring your loan current, Chapter 13 Bankruptcy may be the answer.
Filing a bankruptcy stops the foreclosure immediately. A Chapter 13 case also forces your lender to accept an installment plan to catch up your delinquency over time. Thousands of Mississippians have saved their home from foreclosure by filing a Chapter 13 case. But remember to act quickly! Bankruptcy can only save your home if you file before the foreclosure sale. For more information on how bankruptcy can help, feel free to visit www.therollinsfirm.com.