(a) If a lender or servicer asserts that grounds for acceleration exist and requires the payment in full of all sums secured by the security instrument of a high-cost home loan, the borrower, or anyone authorized to act on the borrower’s behalf, shall have the right at any time, prior to three (3) business days prior to a foreclosure sale, to cure the default and reinstate the home loan by tendering the amount or performance. Cure of default shall reinstate the borrower to the same position as if the default had not occurred and shall nullify, as of the date of the cure, any acceleration of any obligation under the security instrument or note arising from the default.
Terms Used In Tennessee Code 45-20-104
Borrower: means a natural person obligated to pay a home loan, including a co-borrower. See Tennessee Code 45-20-102
Deed: The legal instrument used to transfer title in real property from one person to another.
Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
High-cost home loan: means a home loan in which the terms of the loan meet or exceed the rate threshold or the total points and fees threshold. See Tennessee Code 45-20-102
Home loan: means a loan in which: (A) The principal amount of the loan does not exceed the lesser of the conforming loan size limit for a single-family dwelling as established by the federal national mortgage association, or three hundred fifty thousand dollars ($350,000). See Tennessee Code 45-20-102
Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Person: means any individual, corporation, partnership, trust, or any other business unit or legal entity, as the context may require. See Tennessee Code 45-20-102
Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
Servicer: means any person who in the regular course of business assumes responsibility for servicing and accepting payments for a high-cost home loan. See Tennessee Code 45-20-102
(b) Not less than thirty (30) days prior to publishing notice of foreclosure as provided in § 35-5-104, or commencing an action for judicial foreclosure, a notice of the right to cure the default shall be sent to the borrower informing the borrower of the following:
(1) The nature of default claimed on the home loan, and of the borrower’s right to cure the default by paying the sum of money required to cure the default. If the amount necessary to cure the default will change during the thirty-day period after the effective date of the notice, due to the application of a daily interest rate or the addition of late fees, the notice shall give sufficient information to enable the borrower to calculate the amount at any point during the thirty-day period;(2) The date by which the borrower shall cure the default to avoid acceleration and initiation of foreclosure, or other action to seize the home, which date shall not be less than thirty (30) days after the date the notice is sent, and the name and address and telephone number of a person to whom the payment or tender shall be made;(3) That if the borrower does not cure the default by the date specified, steps may be taken to terminate the borrower’s ownership in the property by requiring payment in full of the home loan and commencing a foreclosure proceeding or other action to seize the home; and(4) The name and address of the lender or servicer and the telephone number of a representative of the person whom the borrower may contact if the borrower disagrees with the assertion that a default has occurred or the correctness of the calculation of the amount required to cure the default.(c) To cure a default under this section, a borrower shall not be required to pay any charge, fee or penalty attributable to the exercise of the right to cure a default as provided for in this section, other than the fees specifically allowed by this section. During the cure period, the borrower shall be liable for any expenses actually incurred to preserve, maintain, or protect the property or the security interest of the lender that are otherwise permitted in the note or deed of trust, or other loan documents. After a lender publicly files a notice of foreclosure or takes other action to seize or transfer ownership of the home, the borrower shall be liable for attorney’s fees that are reasonable and actually incurred by the lender, based on a reasonable hourly rate and a reasonable number of hours and reasonable cost for publishing notice of and conducting the foreclosure sale.(d) A borrower’s right to cure a default prior to commencing a foreclosure proceeding under this section may not be invoked more than once in any twelve-month period.
