It’s tough enough when you’re hit with an unexpected expense, but what do you do when your monthly mortgage payment is more than you can afford? Unfortunately, many Tennessee homeowners are finding themselves in this difficult situation. If you’re one of them, it’s important to understand the Tennessee foreclosure timeline, state foreclosure laws, and what actions you can take to save your home.
This article will break down the entire Tennessee foreclosure process step-by-step. We will discuss the notice of default, the notice of foreclosure sale, what a foreclosure sale is, REO (real estate owned), eviction, and what to do if your house is in foreclosure. Hopefully, this information will help you understand the process better and give you the resources you need to make decisions about your property.
Facts about Tennessee Foreclosures
Foreclosures are on the rise throughout the United States, especially in recent months. From December 2021 to January 2022, foreclosure completions increased by more than 29%. Home foreclosures have also harmed Tennessee homeowners, placing the state 20th for Foreclosure Rates in All 50 States in January 2022.
In Tennessee, the state with the 16th highest population, there were 415 foreclosures out of 2,963,486 housing units. That equates to one foreclosure for every 7,141 homes. Some of the counties with the most foreclosures per housing unit were (from highest to lowest): Haywood, Sequatchie, Smith, Stewart, and Cheatham.
If you’re a Tennessee homeowner approaching pre-foreclosure the timeline can be confusing and overwhelming, but know you’re not alone! We want to help by breaking it down for you so that you know what to expect every step of the way.
The Tennessee Foreclosure Process
In Tennessee, the foreclosure process can be confusing. If your house is in foreclosure, you may feel like you are alone and don’t know where to turn. Below we’ll break down the entire Tennessee foreclosure process for you, step-by-step to walk you through the process.
1 – Notice of Default
The notice of default is the first step in the Tennessee foreclosure process. It is a letter sent by the lender to the homeowner, notifying them that they are in default on their mortgage loan. The notice of default gives the homeowner a chance to cure the default before the lender begins foreclosure proceedings. The lender is required by federal mortgage servicing rules to contact you (or attempt to contact you) by telephone at least once within 36 days after a missed payment and again every 36 days following until the loan is repaid in full.
If you miss a payment, the servicer must notify you in writing within 45 days of receiving your request for information about loss mitigation possibilities and assign personnel to assist you.
If you receive a notice of default, it’s important to immediately take action to save your home.
2 – Notice of Foreclosure Sale
The notice of foreclosure sale is the next step in the Tennessee foreclosure process. This notice is typically sent out after several missed payments have gone unanswered and no mortgage debt has been paid. It is a letter that is sent by the lender to the homeowner, notifying them that the property will be sold at auction. The notice of foreclosure sale gives the homeowner a chance to save their home by either paying off the mortgage loan or finding a new buyer for the property.
The notice of sale is typically sent out after the homeowner has several missed payments and the notice of default has expired. The lender will give the homeowner a set number of days (usually 30) to bring their account current before the foreclosure sale takes place. If you receive a notice of foreclosure sale, it’s important to take action immediately to try to save your home.
There are a few things that you can do if you receive a notice of foreclosure sale. You can try to sell the property yourself, or you can contact a real estate agent to help you sell the home. You can also try to refinance the house or take out a loan against the equity in the property.
If you are unable to sell the property or take out a loan against the equity in the property, you may be able to file for bankruptcy. Filing for bankruptcy will stop the foreclosure process and give you time to reorganize your finances.
It’s important to note that even if you do file for bankruptcy, the lender can still foreclose on the property.
If you are facing foreclosure, it’s important to seek out professional help as soon as possible. There are many organizations and agencies that can help you navigate the foreclosure process and find a solution that works for you.
3 – Foreclosure Sale
A foreclosure sale is a public auction of a property that is held by the lender to recover the money that is owed on the mortgage loan. The property is sold to the highest bidder, and the proceeds from the sale are used to pay off the mortgage loan. If there is any money remaining after the mortgage loan is paid off, it is given to the homeowner. However, if the home sells for less than the mortgage, then the homeowner may still be responsible for the deficiency.
A deficiency judgment is a judgment that the lender can obtain against the homeowner after the foreclosure sale. The deficiency judgment allows the lender to sue the homeowner for the difference between the amount owed on the mortgage and the amount received from the sale of the property.
The deficiency judgment can be a very costly mistake for the homeowner. If you are sued for a deficiency judgment, you will be responsible for the balance of the mortgage loan, plus interest and court costs.
It’s important to note that not all lenders will sue for a deficiency judgment. Some lenders will waive the right to sue for a deficiency judgment as part of a settlement agreement with the homeowner.
If you are facing foreclosure, it’s important that you do not miss the foreclosure sale. If you miss the foreclosure sale, you will lose your home and all of your equity in the property.
It’s also important to note that even if you do attend the foreclosure sale, there is no guarantee that you will be able to keep your home.
If you are unable to keep your home, you will be evicted from the property. The eviction process can be lengthy and stressful, so it’s important to try to avoid foreclosure if at all possible.
4 – Real Estate Owned (REO)
Real estate owned (REO) is a term that is used to describe a property that is owned by the lender after the foreclosure sale. REO is an abbreviation for “real estate owned.”
The term “REO” is typically used to describe a property that is being held by the lender after the foreclosure sale. The bank purchased the home in the foreclosure sale but was unable to sell it for the full amount of the mortgage loan.
The bank will then list the property for sale in an attempt to recoup its losses. If you are looking to purchase a home, you may be able to find a great deal on an REO property.
Whether your home was purchased by a private buyer or its real estate owned, Tennessee foreclosure laws do have a redemption period. The redemption period is a time after the foreclosure sale when the homeowner can still redeem the property. To redeem the property, the owner would have to pay the full amount of the mortgage loan, plus interest and late fees.
The redemption period in Tennessee is two years from the date of the foreclosure sale. If you are facing foreclosure, you should contact an attorney to find out if you have any legal options available to you and your right of redemption period.
If you are unable to redeem the property during the redemption period, the property will be transferred to the new owner. The new owner will then have the right to evict you from the property.
If you are evicted from the property, you will need to find a new place to live. It’s important to note that finding a new place to live can be very difficult and expensive.
5 – Eviction
Eviction is the process of removing a homeowner from a property. Eviction can be a lengthy and stressful process, and it’s important to understand your rights before you begin the eviction process.
There are two types of eviction: judicial and non-judicial. Judicial eviction is the process of evicting a homeowner through the court system. Non- judicial eviction is the process of evicting a homeowner without going through the court system.
The eviction process can be complicated, so it’s important to understand your rights and options before you begin. If you’re facing eviction, there are resources available to help you navigate the process.
No matter what type of foreclosure you’re facing whether it is a judicial or non-judicial foreclosure, it’s important to seek out professional help as soon as possible. There are many organizations and agencies that can help you navigate the foreclosure process and find a solution that works for you.
Don’t wait until it’s too late to get help. If you’re facing foreclosure, there are resources available to help you through the process. Seek professional help as soon as possible, and don’t wait until it’s too late to find a solution.
What To Do If Your House Is In Foreclosure
If you are facing foreclosure, there are a few things that you can do to try to save your home.
Talk to Your Lender
The first thing that you should do is talk to your lender. There may be options available to you that you are not aware of. Your lender may be willing to work with you to find a solution that works for both of you.
If you are having trouble making your payments, your lender may be willing to modify your loan. Loan modification can help make your payments more affordable and help you keep your home. The loss mitigation option may be another solution.
If you are facing foreclosure or having repayment difficulties, it’s important to talk to your lender as soon as possible to see what options are available to you. That way you can avoid losing your house to the bank.
Consider a Short Sale
Another option that may be available to you is a short sale. A short sale is when the lender agrees to accept less than what is owed on the loan.
Short sales can be complicated, and they often take a long time to complete. If you are considering a short sale, it’s important to seek out professional help.
Deed in Lieu of Foreclosure
A third option that may be available to you is a deed in lieu of foreclosure. A deed in lieu of foreclosure is when the borrower signs the deed to the property over to the lender.
Deeds in lieu of foreclosure are often used as a last resort, and they can be complicated. If you are considering a deed in lieu of foreclosure, it’s important to seek out professional help.
Sell Your House
The fourth option is to sell your house. You may be able to sell your house for enough money to pay off your mortgage and avoid foreclosure.
If you are considering selling your house, it’s important to seek out professional help. There are real estate agents that specialize in helping people sell their homes in foreclosure.
File for Bankruptcy
The fifth and final option is to file for bankruptcy. Bankruptcy can stop the foreclosure process and give you time to catch up on your payments. There are typically two types of bankruptcy people will file:
If you are considering filing for bankruptcy, it’s important to seek out professional help. Bankruptcy is a complicated process, and it’s important to have an experienced attorney on your side.
Ultimately, if you can avoid foreclosure or bankruptcy, that would be ideal. Both can have a negative impact on your credit score and stay on your credit report for 7-10 years. So if you are facing foreclosure, it’s important to seek out professional help as soon as possible. Many options are available to help you keep your home or avoid foreclosure.
The Tennessee foreclosure timeline is a complex process and requires the help of an experienced attorney. The best course of action to take when your house or property is in foreclosure is to seek out professional help as soon as possible, whether it be through a short sale, deed in lieu of foreclosure, bankruptcy filing, etc. There are many options available to help you keep your home or property, and an experienced foreclosure lawyer can guide you through the process and find a solution that works best for you.
Lastly, selling your home is also a great option and way for you to avoid foreclosure. If you’re interested in selling your Tennessee house but need to quickly avoid foreclosure, selling to local cash home buyers in Tennessee would be a great option. There are several companies that buy houses in Nashville, Knoxville, and Chattanooga, that would be able to make you an offer for your home within 24-hours and close within 7-days. Nexus Homebuyers is one such company.
We buy houses in Knoxville and all across the state of Tennessee. We can make you a cash offer quickly and purchase your home on your timeline. If you’d like to avoid foreclosure by selling your house, contact us today or visit our website to learn more about our company and how it works. We’d be happy to make you an offer to buy your home in as-is condition and without any realtor fees.
DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. Nexus Homebuyers always encourages you to reach out to an advisor regarding your own situation.