Marcus borrowed $200,000 to purchase a home in Oxford, Mississippi, secured by a deed of trust. He later defaults, and the trustee completes the non-judicial foreclosure process. At the public auction, the property sells for $175,000. Marcus believes that because Mississippi uses non-judicial foreclosure, the lender cannot take any further legal action against him. Which of the following BEST describes the accuracy of Marcus's belief and the lender's actual options under Mississippi law?

Correct Answer

D) Marcus is incorrect; the lender may file a lawsuit to obtain a deficiency judgment for the $25,000 shortfall after the non-judicial sale

Marcus's belief is incorrect. Under Miss. Code Ann. §89-7-1 et seq., Mississippi's non-judicial foreclosure process does not extinguish the borrower's personal liability for any deficiency. After the foreclosure sale produces $175,000 against a $200,000 debt, the lender has a $25,000 deficiency and retains the right to file a separate lawsuit in court to obtain a deficiency judgment against Marcus for that amount. The non-judicial nature of the foreclosure affects how the property is sold, not whether the borrower remains personally liable for the debt.