In Tennessee Judicial and Non-judicial Foreclosure are available to the credit holder if you fail to make your monthly payment or beach other terms of your Deed of Trust or Mortgage. Once foreclosure begins, you typically have 60 days. After the sale, the new owner has the right to file a "Detainer Warrant" to obtain possession. Upon gaining judgment, 10 days after the entry of the judgment a "Writ of Possession" can be issued upon which the new owner can show up with a deputy and remove you and your possessions from the home.
While a statutory Right of Redemption exists the borrower has a period of two (2) years to redeem the property. However, it is considered malpractice for an attorney to fail to include a waiver of the statutory Right of Redemption in the Deed of Trust.
In Tennessee, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure. A judicial foreclosure suit is one where the lender files a complaint against the borrower and obtains a decree of sale from a court having jurisdiction in the county where the property is located. Usually, if the borrower is in default, the Court will set a period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the Court will then order the property to be sold.
A "power of sale" clause is the clause in a Deed of Trust or mortgage, in which the borrower pre-authorizes the sale of property in the event of default. In Deeds of Trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the Trustee.
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.
If the sale of the house did not pay off all the debt of the note (unpaid principal, interest earned and unpaid, costs of the foreclosure and attorney fees) the creditor can sue you for the deficiency.
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