Tennessee Foreclosure Law Summary
Stop Tennessee Foreclosure
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:
- 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.
- 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.
- 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.
- 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.
- 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.
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