Tennessee Foreclosure Laws

Foreclosure Laws in Tennessee

Almost all foreclosures in Tennessee occur through non-judicial means due to the presence of Power of Sales clauses in mortgages. Power of Sale clauses allow the lender to pursue a foreclosure without the need for judicial supervision. A typical foreclosure in Tennessee takes about two months to complete.

Once a borrower defaults on their home mortgage loan, the lender has the power to go ahead and schedule a foreclosure sale of the property. The homeowner has the power to halt foreclosure proceedings at any point up until the time of the sale by paying off the entire amount owed on the loan plus any applicable costs or fees.

Sometimes individual mortgages will carry stipulations dictating the terms, location and time of the foreclosure sale. A Notice of Sale must be issued by the lender outlining these details, and they must also arrange to have it published at least 3 times in a local newspaper within 20 days of the scheduled date of the sale. Generally, the trustee also mails the homeowner a copy of the Notice of Sale to inform them, though it is not required by law.

The foreclosure sale is run in the style of a public auction, where anyone may bid. It must take place between 10am and 4 pm on a weekday. Once a winning bidder has determined and payment is procured, the sale trustee transfers ownership of the property the winning bidder.

Most mortgages in Tennessee have clauses forbidding a right of redemption to the original homeowner once a sale is complete. If this clause does not exist, the homeowner may have up to two years during which they can reclaim their property by paying off the total debt owed plus an interest and applicable costs.