Tennessee Foreclosure Laws

Expected Timeline: About two months
Security Instrument: Mortgage or Deed of Trust. Deed of trust most common.
Type of Process: Judicial or nonjudicial. Nonjudicial foreclosure most commonly used.
Protections for Servicemembers: Tenn. Code Ann. § 26-1-111
Time to Respond: Notice must be published twenty days before sale or posted thirty days before sale. Notice must be sent to homeowners via registered mail before first publication of sheriff sale.
Reinstatement Period: None.
Protections for High-Cost Mortgages: None.
Redemption Period: There is a two year redemption period if judicial foreclosure is used unless waived in mortgage documents.
Eviction Process: New owner may file forcible entry and detainer lawsuit. Warrant must be served on former owner with a trial six days after service. AN immediate writ of possession will order the sheriff to evict.
Deficiency Judgments: Allowed.
Limits on Deficiency Judgments: Deficiency judgments are allowed.
Cash Exempted in Bankruptcy: $4,000 for single person, $8,000 for married couple.
State Statutes: Tenn. Code Ann. § 35-5-101 to 35-5-111, 66-8-101 to 66-8-102

Tennessee foreclosure law allows lenders to pursue foreclosure by following either Judicial or Non-Judicial Foreclosure procedures. If the original loan documents do not contain a power of sale clause, then the lender must sue the borrower to obtain a decree of foreclosure under the Judicial Foreclosure process. The court gives the borrower a set period of time to cure the default. If the borrower can not cure the default, then the court will order the property to be sold.

If a power of sale clause is present in the loan documents, then the lender can follow the Non-Judicial Foreclosure process. If the clause specifies the time, place, and terms of the sale, then those details must be followed.

In Tennessee , the notice of sale must be published for three (3) consecutive weeks in a newspaper of general circulation in the county in which the property is located. The first publication can not be less than twenty (20) days before the sale date. If there is no newspaper to publish the notice in, then the notice may be posted in five public places in the county. One of these places must be on the door of the courthouse, and one other one must be in the neighborhood in which the property is located. No less than twenty (20) days before the sale, the borrower must be served with the notice of sale.

On the scheduled date of the sale, the sheriff will conduct the sale between the hours of 10:00 AM and 4:00 PM . A minimum price for the property may be set by the sheriff, but this price must be at least half (50%) of the fair market value of the property. The high bidder at the auction receives a certificate of sale, with a deed to be received at the end of the redemption period.

Borrowers in Tennessee have a two year right of redemption after the sale, unless this right is waived in the original deed of trust. The lender has the right to sue the borrower for a deficiency judgment if the sale price does not cover the balance due on the loan plus costs.

State Website: www.legislature.state.tn.us