When they take out a mortgage, many homeowner’s don’t fully understand all of the things the lender may be entitled to if the homeowner falls behind on payments and enters a state of default on the loan. A lender, in many states, is entitled to file a deficiency judgment against the homeowner once the property has been foreclosed on. This deficiency judgment is the lender’s means of recovering any amount of money that may be left on the original mortgage after the foreclosure sale of the property. If the property is only valued at $80,000 and the homeowner still owed $120,000 at the time of the foreclosure sale, the lender can file a deficiency judgment against the homeowner in order to keep him responsible for the balance of $40,000 dollars. So, what are the deficiency judgments Mississippi rules?
Deficiency Judgments in Mississippi
The state of Mississippi acknowledges deficiency judgments as an option for lenders as a means of recovering the balance of a mortgaged property that’s been sold in foreclosure. The lender must wait to file for the judgment until the foreclosed property is both sold and closed on, so the actual balance may be assessed for the original homeowner’s debt.
Additional Costs
If a lender files a deficiency judgment against a homeowner and is successful, this judgment holds the homeowner both financially and legally liable for almost all costs incurred by the lender in the judgment proceedings.
- Court costs of the foreclosure may also be added to the list, as well as any filing fees the lender may have had to pay in order to obtain the deficiency judgment.
- This factor can often add thousands of dollars to the balance owed to the lender.
- Many states also entitle the lender to seize many personal belongings of the homeowner’s in order to recover as much of the balance due to the lender as possible.
How Common are Deficiency Judgments?
This can depend entirely upon the state you live in. Some states don’t allow deficiency judgments as an option for the lender at all. In many states, however, this option is left completely up to the lender. Most of the time, even when a state does allow the option of a deficiency judgment to recover a remaining balance, most lenders tend to opt against the process due to the often high initial legal cost of the proceedings. They are able to recover these costs from the homeowner, but never as quickly as intended, usually because if the homeowner had the funds to cover these costs immediately, he or she wouldn’t have wound up in foreclosure in the first place. Obtaining a deficiency judgment can be a lengthy process as well, and most lenders prefer to keep foreclosure proceedings as simple and as quickly resolved as possible.
Getting Help
If your home is facing foreclosure in Mississippi, you should consult with an experienced attorney as soon as possible. Your lawyer can explain any alternatives to foreclosure that exist so you can protect yourself from deficiency judgments.
