What happens to the balance of my loan after a foreclosure?

A foreclosure is the legal process by which a lender reclaims a borrower’s property due to non-payment of their loan. In Mississippi, state law requires the lender to follow certain procedures before a foreclosure can take place. After a foreclosure has been completed, any remaining balance of the loan is referred to as a deficiency. In Mississippi, the lender may seek a deficiency judgment from the borrower. This is essentially a civil lawsuit and, if granted, the court orders the borrower to pay the remaining amount of the loan. The lender can then collect on the debt in various ways, such as by garnishing wages or placing a lien on the borrower’s property. In some cases, a deficiency judgment may not be available to the lender. For example, if the foreclosure sale price does not cover the total amount of the loan, the lender may not be able to recover the remaining balance. The lender may also waive their right to pursue a deficiency judgment. In cases where a deficiency judgment is sought and granted, the borrower must satisfy the remaining balance of the loan. If the borrower is unable to do so then the lender may take further action to collect on the debt. It is important to note that a foreclosure can have a serious impact on a borrower’s credit score and their ability to obtain a loan in the future.

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