Tennessee foreclosure laws: how the process works and how long it takes

• TCA § 35-5-101 et seq.: Non-judicial trustee's sale process, 20-day notice, publication requirements, sale location (a physical place or an online bidding website), postponements
• TCA § 35-5-117 (formerly § 35-5-118): Deficiency judgments — the deficiency is the debt plus foreclosure costs less fair market value; the sale price is presumed to equal fair market value unless the borrower proves it was materially less
• TCA § 26-2-301: $35,000 individual homestead exemption ($52,500 combined for joint owners)
• TCA § 45-20-101 et seq.: High-cost home loan protections

After the trustee's deed is recorded, if the former owner remains in possession, the new owner serves a notice to quit and then files a Detainer Warrant in General Sessions Court or an Unlawful Detainer action in Circuit Court (TCA § 29-18-101 et seq.). If the court rules for the new owner, it issues a Writ of Possession and the sheriff executes the lockout. Under the federal Protecting Tenants at Foreclosure Act, the immediate successor in interest at foreclosure must give bona fide tenants 90 days' notice before eviction and let tenants with leases stay until the lease ends, unless the home is sold to a buyer who will live there, in which case the lease can be ended on 90 days' notice.

Tennessee follows a race-notice recording statute (TCA § 66-26-103). A purchaser who records first and pays value without actual or constructive notice of a prior unrecorded interest takes priority over that prior interest. Tennessee property tax liens have priority over all other liens and encumbrances under TCA § 67-5-2101. Property taxes must be paid from foreclosure proceeds before any mortgage lender receives funds.

Under TCA § 28-2-111(a), liens of mortgages and deeds of trust are barred, and the liens discharged, unless suits to enforce them are brought within ten years from the maturity of the debt. The lien can be extended beyond that ten-year period only by a written instrument that is duly executed and acknowledged and recorded with the register of the county where the property is located (TCA § 28-2-111(c)). Servicers who delay foreclosure for extended periods may face limitations defenses. After a trustee's sale, the lender must bring any deficiency action within 2 years of the date of the trustee's sale under TCA § 35-5-117(d)(1)(A) (formerly § 35-5-118(d)). The sale price is presumed to equal the property's fair market value at the time of the sale; the borrower can overcome that presumption only by proving by a preponderance of the evidence that the property sold for materially less than fair market value.

$35,000. Tennessee's homestead exemption is up to $35,000 for an individual under TCA § 26-2-301. Individuals who jointly own and use a home as their principal residence are entitled to exemptions totaling no more than $52,500, divided equally among them when claimed in the same proceeding; if only one joint owner is involved in the proceeding, that owner's exemption is $35,000. The former larger exemptions for people 62 or older and for individuals with minor children in their custody were deleted by a 2021 amendment effective January 1, 2022. CRITICAL: The homestead exemption does not protect against mortgage or deed of trust foreclosure — the lender can foreclose regardless of the exemption. The exemption is primarily relevant in bankruptcy proceedings and protection from unsecured judgment creditors.