Murfreesboro Foreclosure Specialists

The Mortgage Crisis
Foreclosure Demystified
Foreclosure Options
Short Sale FAQs
Escaping Foreclosure

Murfreeesboro Foreclosure Experts

“My family was really in a bad spot.  We had a monthly house payment we couldn't afford and a mortgage payoff that was more than the house was worth.  I thought we had no options.  I was trying to sell the home myself for more than it was worth without any success.  Fortunately, a friend introduced me to the Jones Team and they agreed to help us out.

“They fully explained to me how a short sale works and helped me through each step of the process.  They dealt directly with the bank to put every detail in place; they helped my family and me stay on an even keel when the bank dragged its feet and the transaction got challenging.  I couldn't be more thrilled with how the Jones Team helped me get out from under my mortgage!
“I don't know what we would have done without them!”

Tina W. Smyrna, TN

Call Anytime 1-800-239-2513 ext. 2044

Foreclosure Demystified

There is a common misconception that once a homeowner misses a payment he is immediately in danger of foreclosure.  The reality is that foreclosure is a legal process that a lender must go through in order to take possession of a property for which it holds a mortgage. 

The Foreclosure Process in Tennessee

The below information covers the most common foreclosure process used by most lending institutions in the state of Tennessee.  It would be impossible to completely cover foreclosure law in this space.  You are encouraged to consult a real estate attorney if you desire to go more in-depth.

Deficiency Judgment

In Tennessee, the lender can obtain a deficiency judgment against a homeowner for any amount they are unable to recover through a foreclosure or short sale.  This means that if you have a mortgage for $200,000 and the bank forecloses and sells the property at auction for $125,000, they could possibly obtain a deficiency judgment for $75,000.

This allows the bank to pursue collections against the homeowner for $75,000.  In most cases this does require an additional legal action against the homeowner to obtain a judgment.  This is another reason that it is so important to exhaust every option a homeowner may have to avoid foreclosure.  This does require a separate action to be filed in court, causing the mortgage company to incur further expense.  The lender is also acutely aware of the borrower’s inability to pay so they often see further collection efforts as fruitless.

The Opportunity Window – Pre-foreclosure

The period of time between the first missed payment and the final bank sale date is called “pre-foreclosure” since the process has begun, but the owner has not lost control of the property.  This is a critical time for the homeowner since he can still legally list the house for sale, sign contracts, and do what he can to avoid foreclosure.  Also, a short sale typically brings more money for a property than the mortgage company can get from an investor at auction, which means a smaller deficiency judgment against the homeowner, if the bank pursues that option.

Opportunity Lost – REO Property

If a property makes it all the way through the foreclosure process, one of two things happen at the end: it is either sold to the highest bidder at auction, or very often it is taken over by the bank as an owned asset.  REO stands for Real Estate Owned.  The bank does not want to take over a homeowner’s property, however when the foreclosure timeline runs out and the house does not sell at auction, the bank has no other choice.  At that point, the bank’s REO or Owned Asset department takes control of the property and there is no further opportunity for the homeowner.

The other major issue with REO property is that once a lender takes over a property and puts I back on the market, many times they do so at highly discounted rates.  These properties will often be the lowest priced in a neighborhood, meaning the bank will likely receive much less from the ultimate sale of the house than they would have from a short sale.

Reasons to Avoid Foreclosure

Surprisingly, many homeowners facing foreclosure simply throw in the towel because they don’t understand the process, think they have no options other than foreclosure, or the mental and emotional strain of pending foreclosure simply beats them down until they no longer care what happens. 

Here are some reasons why you should fight to avoid foreclosure.