Constructive Notice, Real Harm: Why Tennessee's New Foreclosure Law is Political Theatre.

Disclaimer: This article is for educational and informational purposes only. The contributor is not a licensed attorney, and this content does not constitute legal advice. No attorney-client relationship is formed by reading this post or contacting the contributor. All views expressed are personal and based on the contributor’s industry experience and legal education in progress.

Author: Jesus "Jesse" D. Gonzalez Jr. J.D. Candidate at Nashville School of Law

Originally Published: https://fieldtoforum.com/tn-2025-foreclosure-law

Title

Constructive Notice, Real Harm: Why Tennessee’s New Foreclosure Law Is Political Theatre.

Facts

May 2025, Tennessee lawmakers passed Public Chapter 515 (H.B. 1127), amending the state’s foreclosure notice statute under T.C.A. § 35-5-101.

The new law requires online publication of foreclosure notices in addition to newspapers ads for at least 20 days by a third-party platform.

Foreclosure notices are to be sent by certified or registered mail to the property address and other known addresses.

Rescheduling of sales to be announced online and no longer required to be republished in print, unless postponed for more than 30 days.

Issue

Does the 2025 amendment to T.C.A. § 35-5-101 provide meaningful reform to Tennessee's foreclosure notice process, or does it merely perpetuate a system of ineffective, formalistic notice that fails to protect homeowners?

Rules

T.C.A. § 35-5-101 (2025): Foreclosure Sale Requirements

"In any sale of land to foreclose a deed of trust, mortgage, or other lien securing the payment of money or other thing of value or under judicial orders or process, advertisement of the sale must be made:

(1) At least two (2) times in a newspaper published in the county where the sale is to be made; and

(2) By a posting online by a third-party internet posting company for at least twenty (20) continuous days. A posting made pursuant to this subdivision (a)(2) must be posted online in a manner such that the posting is publicly viewable to general internet users."

"The trustee or other party that sells the property shall send to the debtor and any co-debtor a copy of the notice required in § 35-5-104. The notice must be sent on or before the first date of publication provided in subsection (b) by registered or certified mail, return receipt requested. The notice must be sent to the following:

(1) If to the debtor, addressed to the debtor at:

(A) The mailing address of the property, if any; and

(B) The last known mailing address of the debtor or any other mailing address of the debtor specifically designated for purposes of receiving notices provided at least thirty (30) days prior to the first publication date in written correspondence or written notice in accordance with the loan agreement from the debtor to the creditor..."

T.C.A. § 35-5-104 (2025): Identification of Interested Parties

"The advertisement and notice of the foreclosure sale must identify 'parties interested' in the land, including the record holders of any mortgage, deed of trust, or other lien that will be extinguished or adversely affected by the sale."

Terry v. Wilmington Tr., N.A., 703 S.W.3d 274, 281 (Tenn. Ct. App. 2024):

Held that compliance with Tennessee’s statutory notice provisions does not excuse failure to meet stricter deed of trust terms. The court emphasized that Paragraph 22 of the standard Fannie Mae/Freddie Mac Deed of Trust imposed additional notice duties beyond statute, which must be strictly followed.

Paragraph 22, Fannie Mae/Freddie Mac Uniform Security Instrument (Form 3021): “The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale.”

Mathews v. Eldridge, 424 U.S. 319, 335 (1976):

Established the three-part balancing test for determining whether notice and process are constitutionally adequate.

Analysis

T.C.A. § 35-5-101 (2025) is an effort by Tennessee legislators to modernize foreclosure sale notice procedures. The updated statute requires that foreclosure sales be advertised twice in a county newspaper and posted for at least twenty continuous days on a publicly viewable third-party website. It also mandates notice by certified or registered mail to the debtor’s property address and any other known mailing address.

The statute defines proper notice as a combination of (1) dual-format publication (print and online), and (2) mailed notice to the debtor using certified or registered delivery methods. These requirements are intended to satisfy procedural due process and ensure that affected parties have an opportunity to receive notice before foreclosure proceeds.

As written, the statute maintains the traditional reliance on passive notice methods, printed legal advertisements, impersonal online postings, and mailed documents, to fulfill its notice obligations. No additional procedures, such as direct outreach, personal service, or verification of notice receipt, are required by the statute.

While the amendment introduces a digital element, its substance remains unchanged: it prioritizes the appearance of notice over the assurance of communication. The rule assumes that presence in public spaces (online or in print) equates to effective notice. In doing so, it codifies a formalistic system that may satisfy legal process but fails to protect homeowners from unintentional default, confusion, or loss. The statute reflects a minimalist approach to due process, structurally sound but functionally hollow.

T.C.A. § 35-5-104, as amended in 2025, establishes the obligation to identify “parties interested” in the property subject to foreclosure. These include holders of any lien, mortgage, or deed of trust that may be extinguished or adversely affected by the sale.

The statute requires that the foreclosure notice include a list of parties whose interests may be impacted. This provision is intended to inform junior lienholders and other claimants so they may act to protect their rights prior to the sale.

Under current procedures, identifying interested parties is generally based on a records search. There is no statutory requirement to provide actual notice to those parties, only to include their identity in the published advertisement and online posting.

Although the statute appears to promote transparency by identifying affected parties, it stops short of offering them meaningful procedural protection. Simply naming parties in a legal ad does not guarantee they will become aware of the foreclosure or take timely action. Like other notice provisions in Tennessee’s foreclosure framework, this rule emphasizes visibility over accessibility, reinforcing a process where formality substitutes for fairness.

Terry Case v. Wilmington Tr., N.A., 703 S.W.3d 274 (Tenn. Ct. App. 2024), In Terry, the borrower challenged a foreclosure on the grounds that the trustee had failed to comply with Paragraph 22 of the deed of trust, which required advance written notice of default and an opportunity to cure prior to acceleration. Although the lender complied with Tennessee’s statutory notice requirements, it failed to send the contractually mandated Paragraph 22 notice. The borrower was unaware of the foreclosure sale until after it had occurred.

The Court of Appeals held that strict compliance with the deed of trust is required. Satisfying Tennessee’s statutory foreclosure notice provisions do not excuse noncompliance with independently enforceable contractual duties. A foreclosure sale is invalid if the trustee fails to follow the deed’s express notice terms, regardless of whether statutory procedures were followed.

Tennessee’s revised foreclosure law, as amended in 2025, continues to rely exclusively on formal statutory procedures, publication, online posting, and certified mail, as the framework for notice. It neither engages with nor elevates alternative forms of outreach that prioritize actual communication or intervention. The statute does not include any requirement for physical attempts, verified contact, or person-to-person interaction prior to foreclosure.

The Terry court reaffirmed that real notice requires more than technical compliance, it requires adherence to the actual expectations of engagement reflected in loan documents. But even those contract-based notice provisions fall short of what is needed in practice. I’ve stood at the doorsteps of distressed homeowners. I’ve handed them packets, offered phone numbers, explained timelines, and watched that moment become the difference between losing everything and finding a way forward. The 2025 law ignores that lived reality. It enshrines a system that checks legal boxes but does not ask whether anyone on the other end was truly reached. Terry is a reminder that the law can recognize higher standards, but it will take statutory leadership to embed those standards in the process itself.

Mathews v. Eldridge, 424 U.S. 319 (1976), In Mathews, the Supreme Court considered whether the termination of Social Security disability benefits without a pre-termination hearing violated procedural due process. The plaintiff had received written notice and an opportunity to respond in writing, but no oral hearing. He challenged this as constitutionally inadequate.

The Court established a three-part balancing test for evaluating the sufficiency of due process in administrative procedures: (1) the private interest affected; (2) the risk of erroneous deprivation through existing procedures and the probable value of additional safeguards; and (3) the government’s interest, including administrative burdens.

Under Tennessee’s 2025 foreclosure notice regime, the affected private interest, homeownership, is significant. Yet the procedures remain limited to impersonal formats: certified mail, newspaper publication, and online postings. No additional safeguard, such as verified personal outreach, is required or encouraged.

Applying the Mathews test, the 2025 statute arguably fails the balance. The homeowner’s interest is among the most substantial in civil law. The risk of erroneous deprivation is real when notice mechanisms rely on outdated or impersonal formats, and the value of additional safeguards, such as licensed, traceable, in-person outreach, is demonstrably high. Meanwhile, the administrative burden of incorporating licensed real estate agents as outreach intermediaries is low relative to the gravity of the consequences. Under Mathews, procedural due process is not satisfied by routine formality alone. A statute that does not strive for meaningful notice in the face of such weighty consequences cannot be said to meet constitutional or practical fairness.

Conclusion

Foreclosure doesn’t just take a house, it destabilizes families, destroys equity, and ripples through entire communities. And yet, Tennessee’s 2025 reform to the foreclosure notice process remains more stagecraft than substance. By layering in digital postings and preserving certified mail, lawmakers have reinforced the illusion of modernity without confronting the root problem: the law still doesn’t care if homeowners get the message.

I’ve spent over two decades on the ground, knocking on doors, listening to fear, offering real options. I know what works because I’ve seen it. What doesn’t work is assuming that people in crisis will sift through legalese, check third-party websites, or sign for certified mail they don’t understand. Real notice means real outreach. It means showing up. It means giving people a fighting chance.

The 2025 amendment keeps the ritual but discards the responsibility. It protects the process, not the people. That’s not good enough. Tennessee needs a foreclosure system that treats homeowners as humans, not as procedural obstacles. That starts with reform that prioritizes contact over compliance and conversation over convenience.

We can do better. We must do better. Real reform would include:

Mandating three physical attempts by a licensed real estate agent to make in-person contact over a defined period;
Standardized, plain-language door hangers posted with timestamped photo documentation;
Required submission of outreach records as part of the foreclosure file;
Options-based disclosures provided in person, not just by mail;
And incentives for servicers to avoid foreclosure when viable alternatives exist.

These aren’t radical ideas. They’re tested, practical, and cost-effective. Tennessee is home to thousands of licensed professionals ready to step in and do this work. The infrastructure exists. What’s missing is the will.

It’s time to stop pretending that paperwork is protection. It’s time to stop accepting performative gestures in place of procedural justice. And it’s time we demanded a system where notice doesn’t just check a box but opens a door.

Reform means reform, not rebranding. Let’s build something that works.

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