Tennessee Foreclosure Lawyers
If your financial affairs are in disorder and your bills are going unpaid and creditors are harassing you to repay debts, the odds are that the prospect of losing your house is looming ever closer. Foreclosure is the legal process through which a lender or other lien holder obtains ownership and possession of real estate after a borrower has defaulted on their payments. For residential mortgage loans, foreclosure involves a bank or other secured creditor to sell or repossess the real, or immovable, property after the borrower has defaulted on the mortgage or deed of trust agreement. As a state operating under the title theory of mortgages, this may be done through a judicial or a non-judicial process in Tennessee.
Judicial Foreclosure
The judicial foreclosure process requires a lender to file a complaint against the mortgagor who has defaulted on their payment agreement and obtain a decree of sale from the court which has jurisdiction in the county in which the property is located. This must be done before the start of foreclosure proceedings.
If the court finds the mortgagor, or borrower, in default, they will assign a set period of time to pay the overdue amount, in addition to other costs. If the mortgagor does not pay in full within the allotted time, the court will order the sale of the property.
Non-Judicial Foreclosure
This is the primary process of foreclosure in Tennessee and is used when the mortgage or deed of trust includes a "power of sale" clause. In this clause, the borrower pre-authorizes the sale of property to pay off the loan balance if they default. The power given to the lender to sell the property may be executed by the lender or a trustee representing the lender. A power of sale clause may specify the time, place and terms of sale, but is not required to. If it does not, the sale of property follows an established general procedure.
Because non-judicial foreclosure does not involve the court, there is no right to due process, which has been deemed a frivolous defense in contesting foreclosure. Additionally, whether the borrower was given actual notice of the foreclosure is deemed irrelevant as long as the trustee attempted to give notice according to legal procedure.
Right of Redemption
Tennessee has a very long statutory right of redemption, which gives borrower’s the legal right to reclaim property that has already been foreclosed. In order to fulfill this right, the borrower must pay the delinquent loan amount, as well as costs, within 2 years of the foreclosure sale. This is not an option for borrower’s whose mortgage or deed of trust terms include the waiving of this right. Most deeds of trusts in Tennessee used by banks indeed waive this right. For this reason, once a foreclosure sale has occurred, the house no longer belongs to the purchaser and the transfer is complete "when the gavel falls."Deficiency Judgment
Deficiency judgments, though not permitted in every state, are permitted in Tennessee. A deficiency judgment holds the borrower personally liable for any remaining mortgage debt if the sale of property yields less than the delinquent loan amount.
Avoiding and Contesting Foreclosure in Tennessee
If you live in Tennessee and you fear that your home may be foreclosed or you are currently in the foreclosure process, it is not the end. One sure way to stop a foreclosure is through filing a bankruptcy. At the moment of filing your bankruptcy petition, an automatic stay goes into effect which prevents your creditor from foreclosing or taking any further action against you without permission from the Bankruptcy Court. Even if you are behind on your house payments, a Chapter 13 Bankruptcy gives you up to 5 years to get caught up on your house payments, and prevents the creditor from imposing further late fees and other charges.
Foreclosure is a complicated and emotionally trying time. If you are going through foreclosure or fear the threat of imminent foreclosure in Tennessee, our dedicated Chattanooga foreclosure attorneys may be able to help. At Massey & Associates, P.C., we have the skills and resources to help you avoid foreclosure or contest it. We will examine your financial affairs and help you understand your legal options. Call us today with any questions you may have at (473) 697-4529.
