Mississippi Foreclosure Laws

In Mississippi the law allows for both non-judicial and judicial foreclosures. A judicial foreclosure only takes place when the security instrument is a mortgage; essentially this is legal document which makes use of the property to secure the loan.

Most property in Mississippi is purchased where the title remains with the Trustees until such time as the underlying loan has been paid in full. This makes it in the majority a “lien theory” state. When a “power of sale” clause is not used in a loan agreement if a property is purchased through a loan vehicle, the judicial process of foreclosure has to be undertaken. When this is the case the lender does not have to petition the court to sell the property to recover their debt.

The beauty of allowing non-judicial foreclosure to take place is that the process is much faster and it costs less for all parties. However some states believe that if a foreclosure is not processed through the court, matters can get out of control and home owners may be prejudiced, not in Mississippi however. Some power of sale processes are very detailed and every detail has to be stringently adhered to, if they are not the home owner could claim that the sale was invalid, and this opens the doors to rights of redemption, or complete cancellation of the foreclosure.

The only way to stop a foreclosure is for the home owner to pay back the full delinquent amount and bring the loan current. Once the foreclosure sale has been held and the property sold, Mississippi home owners do have rights of redemption in a judicial foreclosure, but not in the non-judicial process. By the same token deficiency judgments are also not allowed. The bank must sell the property for a price to cover all costs.

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