How the Foreclosure Process Works in Tennessee
Facing foreclosure can be overwhelming for any homeowner in Tennessee. If you’re behind on mortgage payments, you probably have many questions: how much notice will you get before foreclosure starts? Can you catch up on missed payments to stop it? In Tennessee, foreclosure laws are stringent, and while the state allows judicial and nonjudicial foreclosures, most foreclosures are nonjudicial. This means the lender can proceed with the process without going to court. As such, understanding the foreclosure process and your rights is the first step in navigating this stressful situation. Let’s break down what it looks like and the options available to you.
Step-By-Step Foreclosure Process in Tennessee
In most of Tennessee foreclosures, here’s how the process works.
- Mortgage Default
Defaulting on your mortgage triggers the foreclosure process. A lender can take control of a property after one late payment, although generally, lenders wait until one has missed several payments. As mentioned, Tennessee allows nonjudicial foreclosures, and there doesn’t have to be a legal proceeding to foreclose your home.
- Notice of Foreclosure
The lender may send you a formal notice of default, signaling that the foreclosure process could move fast. If it’s a nonjudicial foreclosure, Tennessee law requires the lender to either publish a notice of sale in a local newspaper for three consecutive weeks or post the notice in public locations for 30 days if no newspaper is available. You will also receive a copy of the notice by mail.
- Foreclosure Sale
Foreclosure sales are public auctions. The lender may bid the amount owed, including fees, but if a third party outbids them, any extra funds belong to you. If the bid is less than the total debt, the lender can seek a deficiency judgment against the borrower.
Options Available to Homeowners During Foreclosure
There are several ways you can prevent a foreclosure sale in Tennessee, with the most common being:
- Reinstating the Loan
Reinstatement means paying the overdue amount plus fees to bring the mortgage current. The right to reinstate isn’t a guarantee, but if you have a high-cost loan, this may be possible. The terms of your mortgage agreement may also indicate if reinstatement is possible.
- Redemption
Tennessee law gives homeowners the right to redeem the property after a foreclosure sale within two years, unless the mortgage waives that right. Redemption means buying back the property. Many lenders often have borrowers waive this right, so it’s advisable to seek the advice of an attorney to determine how you can stop the foreclosure.
- Loan Modification
Another option that you can explore is loan modification. Many lenders offer loan modification or repayment plans to avoid foreclosure. If you apply for a loss mitigation program before the first notice of sale is mailed or made public, the lender cannot continue the foreclosure until your application is resolved.
- Bankruptcy
Filing for bankruptcy triggers an automatic stay, temporarily stopping foreclosure. While this can provide some breathing room, bankruptcy carries serious consequences, and you should only consider it as a last-resort option.
- Legal Assistance
Meeting with a Tennessee foreclosure attorney early is crucial. They can review your mortgage, explain your options, and help you make timely steps to protect your home.
Contact Us for Legal Help
If foreclosure is looming, don’t wait. Contact our Knoxville real estate attorney at Reynolds, Atkins, Brezina & Stewart, PLLC, today to review your case and discuss the best options to protect your property.
