How to avoid foreclosure in Tennessee

How foreclosure works in Tennessee, step by step

1. Missed payments and pre-foreclosure

   Federal rules generally bar the servicer from starting foreclosure until you are more than 120 days behind. Tennessee no longer requires a separate state notice of the right to foreclose, so act as soon as you fall behind. Your deed of trust may require a default letter first.

   12 C.F.R. § 1024.41(f)

2. Notice of sale mailed to you

   The trustee must send you a copy of the sale notice by registered or certified mail, return receipt requested, on or before the date of the first newspaper publication. It goes to the property address and to another address if you gave one in writing.

   Tenn. Code Ann. § 35-5-101(d)

3. Sale advertised

   The sale must be advertised at least two times in a newspaper published in the county, with the first notice at least 20 days before the sale, and posted online by a third-party internet posting company for at least 20 days in a row.

   Tenn. Code Ann. § 35-5-101(a), (b)

4. Trustee's sale

   The trustee auctions the home to the highest bidder. A sale can be postponed more than once, for up to one year from the original date, without new newspaper ads. If it is postponed more than 30 days, a new notice must be mailed to you at least 10 days before the new date.

   Tenn. Code Ann. § 35-5-101(e)

5. After the sale

   State law provides a two-year right of redemption, but most deeds of trust waive it, so the sale is usually final. The lender can sue for a deficiency within two years. If you do not move out, the new owner must go to court to evict you.

   Tenn. Code Ann. §§ 66-8-101, 35-5-118

Tennessee foreclosure deadlines to know

These are the periods written into the law. Your own dates are on the notices you received. If a notice and this page disagree, trust the notice and ask a counselor or lawyer.

Your rights as a homeowner in Tennessee

Other Tennessee protections

• Mailed notice by certified mail

  The trustee must mail you the sale notice by registered or certified mail, return receipt requested, by the first publication date.

  Tenn. Code Ann. § 35-5-101(d)

• Fair market value defense to a deficiency

  You can reduce or defeat a deficiency claim by proving the home sold for materially less than its fair market value.

  Tenn. Code Ann. § 35-5-118

• Notice of long postponements

  If a sale is postponed for more than 30 days, the new date, time and place must be mailed to you at least 10 calendar days before the sale.

  Tenn. Code Ann. § 35-5-101(e)(3)

Tennessee mortgage assistance programs

If the home is sold for more than you owe

If the home sells for more than the debt and sale costs, the extra should go to junior lienholders and then to you, but we could not confirm the Tennessee statute or the claim steps. Write to the trustee named in your sale notice, ask for an accounting of the sale, and give a current mailing address. Talk to legal aid if the trustee does not answer.

Ways to avoid foreclosure

Most of your options come from federal rules and from whoever owns or insures your loan, so they work the same way in Tennessee as anywhere else. What changes by state is how much time you have to use them.

• Repayment plan
• Forbearance
• Payment deferral or partial claim
• Loan modification
• Reinstatement
• Short sale
• Deed in lieu of foreclosure
• Chapter 13 bankruptcy