Tennessee Foreclosure Laws and Procedures

Tennessee foreclosures, especially nonjudicial ones, can move relatively fast compared to many other states. After a homeowner misses payments, federal law requires lenders to wait at least 120 days before officially starting foreclosure proceedings. Once this period passes and if the default isn't cured, the lender can initiate a nonjudicial foreclosure, which is the most common method in Tennessee and doesn't require court involvement.

Once the required foreclosure notice is sent, and following a three-week newspaper advertisement, the property can be auctioned off to a new owner at a foreclosure sale. In practice, the entire process from missed payment to foreclosure sale can take as little as about a month after the 120-day waiting period, making Tennessee's foreclosure timeline among the fastest ones in the country. However, if the foreclosure is contested or proceeds judicially, or you apply for loss mitigation or file for bankruptcy, the process can take longer.

In summary, Tennessee's nonjudicial foreclosure process is designed to be efficient and can move quickly, often resulting in a foreclosure sale within about five or six months after the initial default. So, don't get caught off guard if you're a homeowner behind in mortgage payments. Learn about Tennessee foreclosure laws and how the Tennessee foreclosure process works, from missing your first payment to a foreclosure sale.

What Are My Rights During Foreclosure in Tennessee?

In a Tennessee foreclosure, you'll most likely get the right to:

• a preforeclosure breach letter
• apply for loss mitigation
• receive a foreclosure notice
• get current on the loan and stop the foreclosure sale
• receive special protections if you're in the military
• pay off the loan to prevent a sale
• file for bankruptcy, and
• get any excess money after a foreclosure sale.

Once you understand the Tennessee foreclosure process and your rights, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

What Is Preforeclosure?

The period after you fall behind in payments, but before a foreclosure officially starts, is generally called the "preforeclosure" stage. (Sometimes, people refer to the period before a foreclosure sale happens as "preforeclosure," too.)

During this time, the servicer can charge you various fees, like late charges and inspection fees, and, in most cases, must inform you about ways to avoid foreclosure and send you a preforeclosure notice called a "breach letter."

When Can a Tennessee Foreclosure Start?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41 (2025).) This 120-day period provides most homeowners ample opportunity to submit a loss mitigation application to the servicer.

What Are the Different Types of Foreclosure in Tennessee?

If you default on your mortgage payments in Tennessee, the lender may foreclose using a judicial or nonjudicial method.

What Is the Process of a Judicial Foreclosure in Tennessee?

A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. The lender will automatically win the case if you don't respond with a written answer.

But if you choose to defend the foreclosure lawsuit, the court will review the evidence and determine the winner. If the lender wins, the judge will enter a judgment and order your home sold at auction.

How Nonjudicial Foreclosures Work

If the lender chooses a nonjudicial foreclosure, it must complete the out-of-court procedures described in the state statutes. After completing the required steps, the lender can sell the home at a foreclosure sale.

Most lenders opt for the nonjudicial process because it's quicker and cheaper than litigating the matter in court.

How Does the Nonjudicial Foreclosure Process in Tennessee Work?

Again, most residential foreclosures in Tennessee are nonjudicial. Here's how the process works.

The lender must either publish notice of the foreclosure sale in a newspaper at least 20 days before the sale or post notice in several public places 30 days before the sale if the county doesn't have a newspaper. (Tenn. Code §§ 35-5-101 to 35-5-103 (2025).) The lender must also mail you (the borrower) a copy of the notice of sale on or before the first publication date. (Tenn. Code § 35-5-101 (2025).)

That's it. Then, the lender holds a foreclosure sale.

Foreclosure Auctions in Tennessee

The sale is an auction, which is open to the public. At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less. The property becomes "real estate owned" (REO) if the lender is the highest bidder. But if a third party is the highest bidder and offers more than you owe, and the sale results in excess proceeds (money over and above what's needed to pay off all the liens on your property), you're entitled to that surplus money.

In some states, including Tennessee, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower (see below).

How Do You Stop a Foreclosure in Tennessee?

A few potential ways to stop a foreclosure and keep your home include reinstating the loan, redeeming the property, or filing for bankruptcy. Working out a loss mitigation option, like a loan modification, will also stop a foreclosure.

Or you might be able to work out a short sale or deed in lieu of foreclosure and avoid foreclosure. But you'll have to give up your home with a short sale or deed in lieu of foreclosure transaction.

Reinstating the Loan

Tennessee law doesn't provide a statutory right to reinstate the loan before the sale, except for high-cost home loans. (Tenn. Code § 45-20-104 (2025).) But many deeds of trust, like the uniform Fannie Mae/Freddie Mac Deed of Trust, provide the borrower the right to cure the default after acceleration and reinstate the loan. Check your loan documents to determine if you get a reinstatement right and, if so, the deadline to complete one.

Is There a Foreclosure Redemption Period in Tennessee?

One way to stop a foreclosure is by "redeeming" the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale.

Some states also provide foreclosed borrowers a redemption period after the foreclosure sale, during which they can buy back the home. In Tennessee, the borrower gets two years after the foreclosure to redeem the property unless the mortgage or deed of trust expressly waives the right of redemption, which these documents frequently do. (Tenn. Code §§ 66-8-101 through 66-8-103 (2025).) Check your loan documents to determine if you waived your redemption rights when taking the loan.

Filing for Bankruptcy

If a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy because of the automatic stay. The stay functions as an injunction that prohibits the lender from foreclosing on your home or otherwise trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. It can also eliminate a mortgage deficiency. But if you're behind in payments, you'll likely lose your home. If you want to delay foreclosure by a few months but are willing to let your home go, filing for Chapter 7 might be an option.

Or, if you want to save your home, filing for Chapter 13 bankruptcy can provide a way for you to catch up on payments and, perhaps, eliminate other debts. People who can afford a monthly Chapter 13 payment can catch up on late payments and keep their homes. To find out about the options available to you, speak with a local bankruptcy attorney.

Foreclosure Protections and Military Servicemembers

The federal Servicemembers Civil Relief Act provides legal protections to military personnel facing foreclosure.

Under state law, if a member of a reserve or Tennessee National Guard unit entered into a mortgage or deed of trust to purchase a home, and is subsequently called into active military service outside the U.S. during hostilities, the lender can't foreclose until 90 days after the servicemember returns to the state. (Tenn. Code § 26-1-111 (2025).)

Are Deficiency Judgments Allowed in Tennessee?

In a foreclosure, the borrower's total mortgage debt frequently exceeds the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed is $300,000, but the home sells for $250,000 at the foreclosure sale. The deficiency is $50,000.

In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount (in our example, $50,000) from the borrower.

Tennessee law allows the lender to get a deficiency judgment after a foreclosure.

Tennessee Deficiency Judgment Laws

In Tennessee, the foreclosing lender can file a lawsuit after the nonjudicial foreclosure to get a deficiency judgment. The deficiency amount may be limited to the difference between the outstanding debt and the property's fair market value at the time of the sale if the borrower shows that the sale price was materially less than the property's value. (Tenn. Code § 35-5-11 (2025).)

What Are the Potential Consequences of Foreclosure?

A foreclosure could result in serious consequences, like lower credit scores, a deficiency judgment (as discussed above), or tax consequences.

Resources for Tennessee Homeowners Facing Foreclosure

The Tennessee Housing Development Agency (THDA) provides information about and help with foreclosure. THDA is a HUD-approved counseling agency and can connect you with a HUD-approved housing counselor who can help you determine the best way to deal with a foreclosure.

For more information about foreclosure, read Nolo's articles. You can:

• Get tips on what to do and what not to do if you're facing a foreclosure.
• Learn about last-minute strategies to stop foreclosure.
• Find out if foreclosures are on the rise.

If you have further questions about Tennessee's foreclosure process or want to learn about potential defenses to a foreclosure and possibly fight the foreclosure in court, consider talking to a foreclosure attorney. If you can't afford a lawyer, Legal Aid Society of Middle Tennessee and the Cumberlands provides legal assistance to eligible homeowners facing foreclosure.