Tennessee Foreclosure Laws

The vast majority of Tennessee foreclosures are non-judicial. Although judicial foreclosures can take place in Tennessee, they are very unusual and usually only used in extenuating circumstances. The Tennessee foreclosure process is also quick - many foreclosures are completed in less than two months.

Pre-Foreclosure

Most mortgages and deeds of trust in Tennessee have a power of sale clause, which permits the lender to repossess a property without going to court if a debtor defaults on the mortgage loan. If a debtor is in default, the lender or the trustee named in the deed of trust can initiate foreclosure and can schedule a foreclosure auction. Before the auction actually takes place, the property is considered in pre-foreclosure. At this stage, the debtor can halt the foreclosure through payment of the default amount and any related costs.

The Foreclosure Auction in Tennessee

Some mortgages and deeds of trust have requirements as to the terms of sale and the time and place for a foreclosure auction. If this is the case, the specific requirements of the terms must be adhered to.

Generally, however, mortgages and deeds of trust do not include such detailed information. In these cases, a notice of auction must be published. This notice contains information such as a description of the property, the names of everyone involved in the foreclosure, the liens on the property, and the location and time of the sale. The notice must first be published in a local newspaper at least twenty days before the auction is to take place. The notice must also be published two more times in the newspaper. Many times, the notice will also be mailed to the debtor, but this is not strictly required by Tennessee foreclosure law.

The trustee will typically hold the foreclosure sale between 10:00am and 4:00pm. The highest bidder is given ownership of the property. In some cases, the redemption period can be as long as two years, but in many cases deeds of trust do not allow any redemption period.