Tennessee
Foreclosure Law
Summary
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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