Tennessee Foreclosure Laws

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Quick Facts

-  Judicial Foreclosure Available: Yes

-  Non-Judicial Foreclosure Available: Yes

-  Primary Security Instruments: Deed of Trust, Mortgage

-  Timeline: Typically 60 days

-  Right of Redemption: Yes

-  Deficiency Judgments Allowed: Yes

In Tennessee, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure

process.

Judicial Foreclosure

The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

  1. A notice of sale must be published at least three (3) different times in a newspaper published in the county where the sale is to be made, with the first publication appearing at least twenty (20) days prior to the sale.
  2. Unless otherwise ordered, if no newspaper is published in said county, the notice of sale must be posted at least thirty (30) days in advance of the sale in at least five (5) public places within the county. At least one of these notices must be placed at the courthouse door and another in the neighborhood of the property itself.
  3. A notice of sale must also be served upon the borrower at least twenty (20) days prior to the date of sale if the borrower is in possession of the property.
  4. The sale must be held between the hours of 10:00 am and 4:00 pm for cash to the highest bidder. The sheriff of each county in the state of Tennessee may set a minimum acceptable price for the property as long as the price is equal to or greater than fifty percent (50%) of the fair market value.
  5. The successful bidder at the foreclosure sale will receive a certificate of sale and may be entitled to receive a deed once the borrowers right of redemption has expired.

Deficiency judgments are allowed in Tennessee and the borrower has a period of two (2) years to redeem the property, unless their right of redemption was waived in the original deed of trust.

More information on Tennessee foreclosure laws.

Judicial Non-Judicial Process Period Sale Publication Redemption Period Sale/NTS
No Yes 40-45 Days 20-25 Days 730 Days Trustee
Non-judicial foreclosures only

Pre-foreclosure Period

In Tennessee, court foreclosures are very rare.  Out-of-court proceedings are customary and occur when a clause exists in a mortgage or deed of trust that authorizes the lender to sell the property if the borrower defaults. Once the borrower defaults on the payment, the trustee assigned in the deed of trust has the authority to begin the foreclosure process and advertise the property for sale. 

The borrower may stop the foreclosure process prior to the sale by paying the total amount owed plus any applicable fees.

The typical foreclosure timeline is approximately two months.

Notice of Sale / Auction

If the deed of trust or mortgage contains a clause that specifies the time, place, and terms of sale, then the specified procedure must be followed. 

The notice of foreclosure sale includes the names of the affected parties, a description of the property, and the date, time, and location of the sale. It also includes all liens on the property.  The notice is published three times in a newspaper, with the first publication appearing at least 20 days prior to the foreclosure sale.

State statute does not require any further notification; however, it’s not uncommon for the trustee to mail a notification of the sale to the borrower.

The sale is held by a trustee between 10:00am and 4:00pm. After the sale, the trustee transfers the ownership to the highest bidder.

Deeds of trust in Tennessee commonly do not allow the borrower to redeem the property after the sale. If this right is not waived, the borrower may redeem the property by paying the total debt plus costs within two years.

STATE OF TENNESSEE GOVERNMENT RESOURCES:

Commission on Children & Youth

Executive Director, Linda O’Neal

Comptroller of the Treasury, Justin P. Wilson

Department of Children’s Services

Commissioner, Katherine O’Day

Department of Commerce & Insurance

Commissioner, Julie Mix McPeak

Division of Consumer Affairs

Department of Economic & Community Development

Commissioner, Bill Hagerty

Department of Finance & Administration

Commissioner, Mark Ernkes

Office of Inspector General, Deborah Y. Faulkner

Department of Financial Institutions

Commissioner, Greg Gonzales

Department of Human Resources

Commissioner, Rebecca Hunter

Department of Human Services

Commissioner, Dr. Raquel Hatter

Department of Labor & Workforce Development

Commissioner, Karla Davis

Department of Revenue

Commissioner, Richard H. Roberts

Department of Treasury

Treasurer, Richard H. Lillard, Jr.

 Governor of Tennessee

Governor, Bill Haslam

Lt. Governor

Ron Ramsey

Office of the Attorney General & Reporter 

Robert E. Cooper. Jr.

Secretary of State

Tre Hargett

Tennessee General Assembly – Bill Search

Tennessee House of Representatives

Find My Representative

Tennessee Senate

Find My Senator


STATE OF TENNESSEE FORECLOSURE RESOURCES:

Attorney General & Reporter’s National Mortgage Settlement FAQs

Fair Housing & Fair Lending – Lawyer’s for Civil Rights –  Tennessee Foreclosure Prevention Resources

Foreclosure Prevention Workshops – Freddie Mac

Tennessee Affordable Housing Coalition

Tennessee Government & Regional Housing Resources

Tennessee Housing Development Agency

Additional Foreclosure Resources

Foreclosure Assistance

Foreclosure Prevention Counselors List

Stages of Foreclosure

ForeclosureKit.org – Tennessee Foreclosure Assistance

HUD Avoid Foreclosure: Tennessee

HUD Homeowner Assistance – Tennessee

HUD Approved Housing Counseling Agencies – Tennessee

Keep My TN Home Program

Tennessee Real Estate Commission

The Lawyer’s Committee for Civil Rights Under Law

REPORT FRAUD OR SCAMS IN TENNESSEE:

Department of Commerce & Insurance, Division of Consumer Affairs – Complaint Process

Department of Financial Institutions – Consumer Complaint Form

Department of Human Services – Report Fraud

Nashville Better Business Bureau – Complaints

Office of the Attorney General – File a Consumer Complaint

State Agencies List – Consumer Fraud Reporting

Tennessee Real Estate Commission – How to File a Complaint

 Prevent Loan Scams

U.S. Consumer Action Website

STATE OF TENNESSEE ADDITIONAL RESOURCES:

Vote! – Vote411.org

STATE OF TENNESSEE SHORT SALE RESOURCES:

ShortSaleCenter.net

STATE OF TENNESSEE COURTS & LAW LIBRARY:

Administrative Office of the Courts

Elizabeth “Libby” Sykes, Administrative Director

Appellate Court Clerk’s Office

Circuit, Criminal & Chancery Courts

Court of Appeals

Court of Criminal Appeals

General Sessions Courts

Juvenile & Family Courts

Municipal Courts

Supreme Court

University of Memphis Law Library

University of Tennessee Knoxville – Joel A. Katz Law Library

FEDERAL GOVERNMENT RESOURCES:

Fannie Mae Loan Look-Up Tool – Find out if your loan is owned by Fannie Mae here.

Financial Fraud Enforcement Task Force

Freddie Mac Loan Look-Up Tool – Find out if Freddie Mac owns your loan here.

Homeowner Crisis Resource Center – Includes tips on avoiding foreclosure.

Homeownership Preservation Foundation – Find Credit Counseling here and HERE.

Information on the OCC’s Independent Foreclosure Review

MyMoney.gov – This site organizes financial education help from over 20 different Federal web sites in one place, including dealing with mortgages.

OCC’s Tips for Avoiding Foreclosure Rescue Scams

Office of the Comptroller of the Currency – For Complaints Against National Banks

Service Members Civil Relief Act – The Act that postpones or suspends certain civil obligations to enable service members to devote their full attention to duty and to relieve stress on their families. The act covers:

•       Outstanding credit card debt

•       Mortgage payments

•       Pending trials

•       Taxes

•       Termination of lease

•       Eviction from housing

•       Life insurance protection

Get more information at Military.com or at HUD’s National Servicing Center, and here is Information for Veterans from HUD.

U.S. Congressional Representative Look-up Tool


 

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