Foreclosure Law in Tennessee
In Mount Pleasant, Tennessee is a process authorizing a lender of a mortgage to take possession or ownership of the property that secured the mortgage in the first place, to cut their losses when a borrower defaults on his or her loan.
When consumers have to deal with foreclosure, it almost always involves a home. The bank will normally take possession of the house, and then sell it at auction, to try to encompass the balance of the mortgage. Banks typically want sell the property quickly, for as much money as possible.
In every state, including Tennessee, homeowners have the option to go through what is known as a foreclosure by judicial sale. Essentially, this means a court will oversee the sale of the house to ensure that the bank makes reasonable efforts to sell it for as high a price as possible (to help avoid a deficiency that the borrower may have to pay), and to ensure that any money which might be left over from the sale (after the balance on the mortgage is paid) goes to the borrower.
Some states treat mortgages as "non-recourse loans." A non-recourse loan is one that is secured by the borrower's property, but for which the borrower is not personally liable. Essentially, this means that a lender in a foreclosure can take the house that was mortgaged, but nothing else. If the house sells for less than the lender is owed, it cannot go after the borrower.
How to Possibly Avoid Foreclosure in Mount Pleasant, Tennessee
Communication between you and your lender is perhaps the most significant way to prevent foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.
You should remember that the bank doesn't really want your house. They approved a mortgage hoping to make a profit from interest, and that's what they'd much rather do. They aren't in the business of buying and managing real estate. Therefore, banks will sometimes go to surprising lengths to accommodate your financial hardship, especially if it's temporary.
Because banks don't specifically enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. Nonetheless, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.
Lastly, there is the "short sale." Typically considered a last resort, a short sale results in the borrower losing their home, but discharges almost all of their remaining mortgage debt. If the house is worth far less than the balance of the mortgage, this might be a good choice. In Tennessee, when a house is sold in a short sale, the proceeds go to the lender. If it sells for less than the mortgage balance, whatever's leftover is forgiven. If it sells for more, the surplus goes to the homeowner.
Can a Mount Pleasant, Tennessee real estate attorney help?
If you live in Mount Pleasant, Tennessee and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an efficient real estate lawyer probably will.