Tennessee Foreclosure Law Summary

Tennessee Laws Subject To Change

The Tennessee foreclosure summary below provides information on your state’s most common foreclosure rules. However, you should also know that your state’s foreclosure laws and procedures are subject to legislative, judicial, and local rule changes.

The information below is intended to provide you with a starting point for understanding the intricacies and complexity of your state’s foreclosure law.

You will also need to consult with a local foreclosure defense lawyer to obtain a complete and current understanding of your state’s foreclosure laws and how they may apply to your specific legal and financial situation.

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 when 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 time to pay the delinquent amount, plus costs. If the borrower does not pay within the specified 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 the property to pay off the balance on loan in the event of 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:

Notice Requirements And Rules

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 borrower’s right of redemption has expired.

Deficiency Judgments Allowed And Borrower’s Right To Redemption

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. 

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Reference Source: U. S. Foreclosure