Tennessee Foreclosure Laws

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Judicial Foreclosure Available:	Yes
Non-Judicial Foreclosure Available:	Yes
Primary Security Instruments:	Deed of Trust, Mortgage
Timeline:	Typically 60 days
Right of Redemption:	Yes
Deficiency Judgments Allowed:	Yes

In Tennessee, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

Judicial Foreclosure involves the sale of the mortgaged property under the supervision of a court. The property is subject to auction by the county sheriff or some other officer of the court. The proceeds first go to the lender to satisfy the mortgage; then other lien holders; and, finally, to the borrower if any proceeds are left. All parties must be notified of the foreclosure. A judicial decision is announced after pleadings at a hearing in a state or local court.

Non-Judicial Foreclosure (Power of Sale)

Also known as Foreclosure by power of sale, Non-Judicial Foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. This process involves the sale of the property by the mortgage holder without court supervision. It is generally more expedient than foreclosure by judicial sale. As in judicial sale, the mortgage holder and other lien holders are respectively first and second claimants to the proceeds from the sale.

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A notice of sale must be published at least three (3) different times in a newspaper published in the county where the sale is to be made, with the first publication appearing at least twenty (20) days prior to the sale.


2. Unless otherwise ordered, if no newspaper is published in said county, the notice of sale must be posted at least thirty (30) days in advance of the sale in at least five (5) public places within the county. At least one of these notices must be placed at the courthouse door and another in the neighborhood of the property itself.


3. A notice of sale must also be served upon the borrower at least twenty (20) days prior to the date of sale if the borrower is in possession of the property.


4. The sale must be held between the hours of 10:00 am and 4:00 pm for cash to the highest bidder. The sheriff of each county in the state of Tennessee may set a minimum acceptable price for the property as long as the price is equal to or greater than fifty percent (50%) of the fair market value.


5. The successful bidder at the foreclosure sale will receive a certificate of sale and may be entitled to receive a deed once the borrowers right of redemption has expired.

Deficiency judgments are allowed in Tennessee and the borrower has a period of two (2) years to redeem the property, unless their right of redemption was waived in the original deed of trust.

United States Foreclosure Law