Foreclosures in Tennessee happen quickly. You might only get about 20 days' notice before your home is sold at a foreclosure sale. If you’re worried about, or if a foreclosure is looming, and you live in the state of Tennessee, you should learn about Tennessee’s foreclosure laws and procedures so you know exactly how the foreclosure process works and how long it will take.
Read on to find a synopsis of the basic information that generally applies to most homeowners facing foreclosure in Tennessee along with citations to the statutes so you can read the law yourself.
The citations to Tennessee’s foreclosure statutes are:
We’ve summarized important parts of Tennessee’s foreclosure laws below. You can find more detailed articles on various aspects of Tennessee foreclosure law in Nolo’s Tennessee Foreclosure Law Center.
The majority of foreclosures in Tennessee are nonjudicial, which means they happen outside of court with a third-party (a trustee) managing the process. Judicial foreclosures, where the lender files a lawsuit to foreclose the home, are also possible. (Learn more about nonjudicial and judicial foreclosures.) Since most foreclosures in Tennessee are nonjudicial, this article focuses on that process.
In Tennessee, the foreclosing party must:
On or before the date of the first publication, the trustee must mail the borrower a copy of the notice of sale. Tenn. Code Ann. § 35-5-101.
Tennessee law provides special protections against foreclosure to certain military service members and to borrowers who take out a type of loan called a “high-cost home loan.”
Protection against foreclosure for members of a reserve or Tennessee national guard unit. Under Tennessee law, if a member of a reserve or Tennessee national guard unit entered into a mortgage or deed of trust to purchase a home, and the person is subsequently called into active military service outside the United States during hostilities, the lender may not foreclose until 90 days following the person's return to Tennessee. Tenn. Code Ann. § 26-1-111. (There is also a federal law that provides foreclosure protections to military service members. Learn about federal protections against foreclosure under the Servicemembers Civil Relief Act.)
Protections regarding high-cost home loans. In the case of a high-cost home loan (a type of mortgage loan where the annual percentage rate or points and fees exceed certain amounts), the lender must send a notice of right to cure to the borrower at least 30 days before publishing the notice of foreclosure. Tenn. Code Ann. § 45-20-104.
“Reinstating” is when you catch up on the missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Tennessee law does not provide a borrower with a right to cure the default and reinstate the loan before the sale (unless the loan is a high-cost home loan), but the loan contract itself may provide this right.
In the case of a high-cost home loan, the borrower can cure the default at any time prior to three business days before the sale. The lender must provide a notice before publishing the notice of foreclosure (or starting a judicial foreclosure) that gives the borrower 30 days to reinstate. A borrower's right to cure the default prior to commencing a foreclosure proceeding may be exercised only once in any 12-month period. Tenn. Code Ann. § 45-20-104.
Certain states permit you to redeem (repurchase) your home within a certain period of time after the foreclosure. In Tennessee, you get two years after the foreclosure to redeem the home unless the mortgage or deed of trust that you signed when taking out the loan specifically waives the right of redemption. Tenn. Code Ann. § § 66-8-101 through 66-8-103. (To get details on redemption after a foreclosure in Tennessee, see Nolo’s article If I lose my home to foreclosure in Tennessee, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
There is no anti-deficiency law in Tennessee. This means the foreclosing party can file a separate lawsuit after the foreclosure sale to get a deficiency judgment against the homeowner. Tenn. Code Ann. § 35-5-118. (For a summary of the deficiency law in Tennessee, see Tennessee Laws on Post-Foreclosure Deficiency.)
Once a nonjudicial foreclosure in Tennessee is over, the purchaser may start an eviction action.