Tennessee Foreclosure Laws

The State of Tennessee provides for both judicial and non-judicial foreclosure procedures. However the judicial, or court, foreclosures are very rare. It is common to have an out-of-court foreclosure, as generally there is a clause dictating the power of sale and it is included in the mortgage deed that authorizes the concerned lender to dispose the property in sale. This process is initiated so that the loss from the debt can be recovered.

In the State of Tennessee the foreclosure procedure normally takes about two months.

Period of Pre Foreclosure

The foreclosure procedure may be initiated once a default in payment is created by the borrower. The lender exercises his authority to begin the process of foreclosure upon default and can advertise the property for sale.

The borrower shall be entitled to stop the foreclosure process before the sale can take place by remitting the entire amount owed in full, plus any other applicable costs and interest.

Auction Notice

Upon deciding to advertise the property for a foreclosure sale, the lender shall follow the prescribed clause in the mortgage that specifies the time, place, and terms of sale, if there is such a clause. In the absence of such a clause, the notice of sale shall contain the relevant details and the same are to be adhered to.

The notice of foreclosure shall be issued to the concerned parties and the said notice shall contain:

  • Complete description of the property along with the legal address
  • Time and date of the proposed auction sale
  • Location where the sale is to be conducted

The notice of foreclosure sale is to be published in a newspaper for a minimum of 3 times, with the first date of publication not earlier than a period of 20 days from the date of the intended sale. This condition is not applicable if the total indebtedness of the borrower is not more than $200, in which case the notice can be hand-written and posted.

The notice of sale shall include all stake-holders, liens and other concerned parties.

The State of Tennessee does not require the issue of any further notification. But the lender may, at his will, issue a notice of sale to the borrower by mail. Where the notification cannot be published, the lender has to post the notice of sale at 5 (five) different prominent locations in the location where the property is located, one of which shall the courthouse door.

The sale is conducted on the designated date, time and location, between 10:00am and 4:00pm by a trustee. The highest bidder is awarded the ownership and the transfer of ownership is done by the trustee.

Generally, deeds of trust in the State of Tennessee do not permit the borrower the redemption of the property after the sale is conducted. However, if the right to redemption is not waived, the borrower has the option of redeeming the property by paying the total amounts due plus costs within a period of two years from the date of the sale.

If you need more information about Tennessee foreclosure laws, you should contact a foreclosure lawyer, or contact us so we can recommend one for you.

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