- 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.
