Finance
Under a Tennessee deed of trust, if the borrower defaults, the lender may foreclose through:
AFiling a lawsuit in Chancery Court only
BA non-judicial trustee's sale (power of sale foreclosure)✓ Correct
CRequesting TREC to order the sale
DIssuing a lis pendens and waiting for court approval
Explanation
Tennessee's deed of trust contains a power-of-sale clause allowing the trustee to sell the property without court involvement upon default. This non-judicial process is faster than judicial foreclosure.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
TREC Regulation
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