Facing Foreclosure in Mississippi: Your Options

Facing foreclosure in Mississippi

If you have opened a letter you did not want to open, or seen your address in a notice in the paper, the first thing worth saying is that you have more options than that letter suggests. This page explains how foreclosure actually works in Mississippi, in plain language, and what each of your real choices is. Two of the best ones cost you nothing and have nothing to do with us. Those come first, because for a lot of people keeping the house is the better outcome, and you should hear that from us before you hear anything else. This is general information about Mississippi foreclosure, not legal advice about your loan. Your servicer, a Mississippi attorney, and a free HUD-approved counselor are the people who can advise on your situation.

Call your servicer and a free HUD counselor first

For a lot of people the better answer is keeping the house, and there are two free calls that come before any conversation with us. Call the servicer on your statement and ask about reinstatement, a repayment plan or a modification. Then call a HUD-approved housing counselor on 1-800-569-4287. HUD counseling is free, they do not sell anything, and they will tell you honestly whether the house is savable.

Call these two numbers before you call anybody else

Call your loan servicer and ask for the loss mitigation department, not general customer service. Ask what it would take to reinstate, what plans you qualify for, and write down the name of the person you spoke to. Then call a HUD-approved housing counselor at 1-800-569-4287. That counseling is free, it is not a sales call, and the counselor works for you rather than for the lender. They know which programs your particular servicer runs, and they will get on the phone with the servicer alongside you. If keeping your house is possible, those two calls are how it happens. Nothing further down this page beats keeping the house when keeping it is realistic.

How foreclosure actually works in Mississippi

Most Mississippi home loans are secured by a deed of trust, and most foreclosures here are non-judicial. That means the lender does not have to sue you first. A trustee named in the deed of trust, usually a substituted trustee appointed by the lender, sells the property at public auction after notice is given. The notice is published in a newspaper in the county where the property sits, for three consecutive weeks, and it is posted publicly as well. There is no case on a docket and there is no lis pendens to look for. Because no court calendar is involved, the process moves faster than most people picture, and that is the part that catches people out.

There is no do-over after the sale

This is the difference that matters most, and it is the one people most often have backwards. If a house is sold at the county tax sale for unpaid taxes, Mississippi gives the owner two years from that sale to redeem it. A foreclosure under a deed of trust does not work that way. There is no automatic right of redemption after a Mississippi trustee sale. Once the sale happens and the trustee's deed is delivered, ownership has moved, and every option on this page has gone with it. Everything you are able to do, you do before the sale date. That is not a scare tactic. It is the single most useful fact here.

The honest list of what you can do

Reinstate: pay the arrears, fees and costs in one lump, and the loan goes back to current. Repayment plan: the arrears get spread over the next several months on top of your normal payment. Forbearance: payments paused or reduced for a defined period, generally for a documented hardship. Modification: the servicer changes the terms of the loan itself, the rate, the length or the balance, so the payment becomes one you can actually make. Short sale: with the servicer's written approval, the house sells for less than the balance owed. Sell before the sale date: the loan is paid off at closing and you keep whatever is left. Or you let it go, which is sometimes the right answer too.

When selling is the option that makes sense

Selling is worth looking at in a fairly narrow set of cases. You have real equity that a foreclosure sale would hand to somebody else. Your income changed permanently and even a modified payment is out of reach. The house needs work you cannot fund, so listing it on the open market is not realistic. Or you want this finished on a date you choose rather than one that gets chosen for you. If none of that describes your situation, and a modification or a repayment plan puts the payment back within reach, take that instead. We will tell you the same thing on the phone that we are telling you here.

How selling before the sale date works here

It runs like any other closing, with one addition. The closing attorney orders a written payoff from your servicer, the sale pays that off, and the difference is wired to you. What we need from you early is the sale date and the servicer's contact information, because timing is the whole question. Some files can be closed comfortably ahead of a scheduled sale. Some cannot, and if yours cannot we will tell you that rather than tie your house up while the clock runs down. If the price will not cover the payoff, then it becomes a short sale, and that only moves forward with your servicer's written approval.

Questions we get asked

Does the bank have to take me to court in Mississippi?

Usually not. Most Mississippi foreclosures are non-judicial trustee sales under a deed of trust, which means there is no lawsuit and no judge involved. Judicial foreclosures exist but they are the exception. Your own deed of trust is the document that governs your situation, so read it, or hand it to a housing counselor or an attorney to read for you.

How much warning will I get?

The notice of sale is published in a newspaper in the county for three consecutive weeks and posted publicly. That is a shorter window than most people expect, and it usually arrives after months of default letters. If default letters have already started coming, you are still inside the stretch where reinstating and modification are easiest. That is the time to call the servicer.

Can I get the house back after the foreclosure sale?

No, not as a matter of right. Mississippi gives an owner two years to redeem after a tax sale, and people understandably assume foreclosure works the same way. It does not. There is no automatic right of redemption after a trustee sale under a deed of trust. Everything worth doing happens before the sale date.

Is HUD counseling really free?

Yes. HUD-approved counseling agencies are funded to do this work and they do not charge homeowners for foreclosure counseling. The number is 1-800-569-4287. If anybody asks you for money up front to save your house or to negotiate with your lender on your behalf, stop and call a counselor instead.

Will selling hurt my credit less than a foreclosure?

A completed foreclosure is reported and stays on your file for years. A sale that pays the loan off in full is simply a loan paid off. A short sale sits somewhere between the two and how it gets reported depends on the servicer. We are not credit advisors. A HUD counselor will go through your specific circumstances with you at no cost, and that is the better place to get this answered.

How fast can you actually close?

That depends on the title, not on us. A clean title with one loan on it can move in a couple of weeks. An estate, an old lien or a second mortgage takes longer, and the payoff still has to come back from the servicer in writing. Tell us the sale date on the first call and we will tell you honestly whether it fits, before you start counting on it.