Tennessee Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: 24 Months
Deficiency Judgments Allowed: Yes
Time Frame: 60 Days
Public Notice: Publication
Tennessee is considered to be a title theory state, which means that a property title will remain in trust until the loan is paid in full. A title in Tennessee can be secured by either a mortgage or a deed of trust. If a borrower defaults on their loan in Tennessee, two types of foreclosures are allowed: judicial or a non-judicial.
Once the property is sold at auction, borrowers have a 24 month redemption period to reclaim the property by paying off the delinquent loan and any additional costs. The state also permits deficiency judgments for lenders when a property is sold for less than what was owed on it. If the judgment is granted, the borrower will be responsible to pay the difference between the amount the property sold for and the amount of their default.
Types of Foreclosures Allowed in Tennessee
Judicial foreclosure, or foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The lender must file a formal complaint against the borrower to obtain a decree of sale from a court in the county where the property is located to initiate the proceedings. The court will allow the borrower some time to pay the default but if they cannot, the property will be sold at auction to the highest bidder.
Non-judicial foreclosure, also known as foreclosure by power of sale, allows for the property to be sold without court supervision. In order for non-judicial foreclosures in Tennessee to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default to be able to recover what is owed on it.
There are two ways in which a non-judicial foreclosure in Tennessee can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following must occur:
1. A notice of sale must be served to the borrower at least twenty (20) days before the scheduled sale date.
2. A copy of the notice must be published in a newspaper that circulates where the sale will occur at least three (3) separate times. The first publication must appear at least twenty (20) days before the scheduled sale date.
3. If there is no newspaper in the county, the notice of sale must be posted at least thirty (30) days prior to the sale in at least five (5) public places around the county. At least one of the notices must be placed at the county courthouse door and another must be placed in the neighborhood where the property is located.
4. The foreclosure sale must be held between 10 am and 4 pm. It will be sold for cash to the highest bidder. Foreclosure laws in Tennessee allow the sheriff of each county the ability to set a minimum price for the property as long as the price is equal to or greater than fifty percent of the fair market value.
5. The winning bidder will receive a certificate of sale and may be entitled to receive a deed once the borrower’s right of redemption has expired.
Hiring Legal Help
Being served with a foreclosure notice is a frightening concept. Unfortunately, it is a reality for many homeowners in Tennessee who are struggling to make it in a downtrodden economy. Even though foreclosure may be eminent, there is still a way to stop it. Contact an acclaimed foreclosure lawyer in Tennessee to fight for your rights and prevent your home from being repossessed.
Foreclosure attorneys make it their mission to stop lenders from seizing your property. They will speak to your lender and try to work out an alternative plan of action, such as mortgage modification or short sale, so that your home does not get foreclosed. Rest assured that your foreclosure attorney will do whatever it takes to make sure your case ends with the best possible outcome.
Regardless of your reasons for defaulting, you can still stop foreclosure on your home. Speak to a top team of foreclosure lawyers in Tennessee today to get started on your case and fight for your rights as a homeowner.