Tennessee Foreclosure Law

In Tennessee state Judicial Foreclosure and non-Judicial foreclosure both approaches are used. In Tennessee state foreclosure timeline ranges up to 60 days. Tennessee foreclosure law gives endorsement to deed of trust and mortgage as primary security instruments. Tennessee foreclosure law authorizes the statutory right of redemption. Deficiency judgments are also allowed by Tennessee Foreclosure law but it depends on the procedure used.

By way of non-judicial or judicial foreclosure process lenders in the state of Tennessee may foreclose on deeds of trusts or mortgages in default occurs.

Judicial Foreclosure
The judicial foreclosure process authorizes lender, filing a lawsuit to obtain a court order to foreclose on a particular property. The property is auctioned off to the uppermost bidder condition the Court orders to foreclose. The judicial foreclosure process is mostly practiced when mortgage or deed of trust holds the clause “No power of sale. While using judicial foreclosure, the foreclosure process is performed in accordance to the term and conditions of that clause.

Non-Judicial Foreclosure
In case of default Tennessee foreclosure law authorizes the lender to carry out the process of non-judicial foreclosure if a power of sale clause exists in the deed of trust documents. Deed of trust containing the “Power of sale” allows the lender to sell the property in favor of paying off balance of the loan in the case borrower defaults. Lender and their representatives can sell the property bearing the deeds of trust having power of sale clause.
Rules to be followed in the non-judicial foreclosure are explained below in “power of sale foreclosure guiding principles”

Power of sale foreclosure guiding principles
If the deed of trust comprises of the “power of sale clause” which specifies the time, place and the terms of sale then the specified course of actions must be followed. If power of sale clause does not facilitate the specifications of time, place and terms of sale then non-judicial foreclosure would be followed as bellow:
•    The notice issued to foreclose must be published in newspaper having general circulation in the county in which the property is located every week for three (4) consecutive weeks.
•    Sheriff will conduct sale, any one may bid at sale including the lender. The property will be auctioned off to the uppermost bidder for cash.
•    Sheriff will decide the price of the property at which sale will be made. That price must be equal to 50 % or more than the fair market value of the property.
•    Qualified bidder will get certificate and with confirmation of sale will get deed. With this borrower will loose all rights of redemption. In case right of redemption is not surrendered in the deed then borrower will get 2 years to redeem the property.