TBA Bill Streamlines Tennessee Foreclosures with Improved Access and Affordability

Foreclosures can be a stressful and confusing time for homeowners. Public notices of foreclosures play a critical role in the process. For many years, these notices have been published in newspapers, which has become an increasingly outdated and ineffective method of distributing information to the public. The cost of posting foreclosure notices in print newspapers can be substantial, with homeowners paying upwards of $2,000 just for the notice publication.

In today’s digital age, it’s time to re-evaluate the practice and embrace more modern methods of communicating foreclosure information to the public.

Public notices of foreclosures are intended to make the public aware of pending foreclosure sales and attract potential buyers. Current law requires that public notice must be published in a newspaper of general circulation within the county where the foreclosed property is located. The law also requires that a notice of foreclosure sale must run three times within 20 days of the sale date. This creates a guessing game for potential purchasers and the public, who must figure out which newspaper in the county contains the notice and on which days it will be published. By transitioning to a single statewide digital platform, foreclosure notices can reach a much wider audience.

The Tennessee Bankers Association’s priority legislation—SB 1324 (Bailey) / HB 1355 (Farmer)—will modernize the state’s antiquated foreclosure process and help struggling homeowners, Tennesseans, financial institutions, and investors. A major component of the bill is the creation of a state-operated, user-friendly website to host all public notices of foreclosures in Tennessee. This will ensure that these notices are accessible to everyone at no cost, 24/7 for 20 days prior to the sale.

The borrower will continue to be notified under current law, which requires that borrowers themselves be sent notice of the foreclosure via direct, registered mail.

By attracting as many potential buyers as possible to a foreclosure sale, struggling homeowners can reduce the deficiency they owe the lender. This is particularly important for those facing financial difficulties, as they are legally responsible for the difference between the sale price and the remaining loan amount. It also helps maintain property values in the community. Bringing in one more bidder to a sale can increase the price, which supports the values of neighboring properties.

With this legislation, posting foreclosure notices on a website operated and managed by the Secretary of State’s office will add credibility to the process. The cost will also be lowered significantly to  $200 per foreclosure. Currently, the cost of posting the three required notices in print newspapers is one of the most expensive aspects of the foreclosure process, sometimes costing homeowners an additional $600 to $2,000—and sometimes more.

If a homeowner who is facing financial difficulties hopes to reconcile overdue payments and avoid foreclosure, they must also pay all incurred costs up to that point in the process. For many struggling homeowners, the cost of publishing newspaper notices required by law can be a burden too heavy to bear, potentially resulting in the loss of their home.

TBA’s foreclosure modernization legislation recognizes that print newspapers are no longer the best, most accessible source for public foreclosure notices. Moving from print to digital communication will make the information more accessible, cost-effective, and up-to-date. This change will benefit not only property owners, but also the wider community, by providing a more efficient and equitable way to share this important information.

We expect opposition from newspapers across the state as this will deprive them of income. However, in our view, struggling homeowners ought not bear this financial burden and should be given every opportunity to access a wider market of potential buyers for a better sale price.

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