Q: Delaying foreclsoure
Sibling in TN is has dementia. Somehow quit paying her Home Loan. She owes ~$20K Balance on Loan, House Value ~$200K. House is set to go to auciton Sept. 20. I got power of attorney, and contacted the Collection Agency. The account is $3,600 in arrears (amount provided by the Debt Collection Agency) and ~$6,000 in debt collection fees. I wired $3,600 but they refused to apply it to the account to bring the account current. Said that we had to pay $9,900 (arrers plus fees) and they were returning the $3,600. Is this legal? They have blocked access to the online account.
A:
Tennessee law provides a right to reinstate and cure default before sale. You may be hitting a roadblock in that the bank is playing games by not recognizing the Power of Attorney, such that you may need to make a motion and bring the reinstatement before a judge.
"Reinstating" is when a borrower pays the overdue amount, plus fees and costs, to bring the loan current and stop a foreclosure. Tennessee, however, doesn't have a law that gives a borrower the right to cure the default and reinstate before the sale, unless the loan is a high-cost home loan. (Tenn. Code Ann. § 45-20-104). But the loan contract might provide time for the borrower to complete a reinstatement.
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