Month: September 2022

Per the Numbers: Tennessee foreclosures are historically low, but storm clouds are forming

My banker clients are a pessimistic bunch.

That’s partially because the bankers that I deal with are in “special assets” or are the bank’s general counsel.

Long story short, they aren’t the ones at the ribbon-cutting ceremony for the expensive new restaurant; nope, my clients are the ones who get called in at the end, when the loan has gone bad and we’re figuring out what to do with used restaurant equipment. My clients always notice the storm clouds on the horizon.

With that in mind, for more than a year, they’ve been predicting a tidal wave of commercial and consumer loan defaults, followed by a spike in foreclosures.

And, generally, they’ve been wrong.

In Tennessee, one recent study showed that–to date–there have only been 3,316 foreclosure sale notices published (state-wide) in 2022. That sounds like a lot, but it’s less than a third of what we had in 2017 (10,810) and 2018 (11,711).

In 2022, the most sale notices have been published in Shelby County (496), followed by Hamilton County (304), Davidson County (271), and Knox County (223). Honorable mention to Williamson County (153) and Montgomery County (132).

The 3,316 figure for 2022 is an increase from 2021 (2,169). These drop aren’t entirely COVID driven, as Tennessee had just 5,982 sale notices published in the pre-pandemic glory days of 2019.

That low volume in 2019-2020 was the result of a number of factors, including COVID-related forbearances, sky-rocketing property values, and low interest rates. And, as you know, all of those factors are disappearing.

(Side-note: We can’t be sure about COVID, of course, but I’m pretty sure we won’t see mortgage rates in the 2’s and 3’s for a very long time.)

In the end, here’s where the bankers are probably right: There’s a backlog of foreclosures, and the crush is coming soon. The bankers are correct that the sky is falling; their timing was just off by a year.

Commercial Foreclosure Opportunity in Dickson!

Despite all the doom and gloom predictions, foreclosures haven’t skyrocketed in 2022.

Having said that, in the Middle Tennessee area, there remains a surprising amount of interest (and money) in the foreclosures that do happen. In June, I wrote about four foreclosure sales that were pending and, for every single one, at least 10 people showed up and, in the end, I had excess proceeds (meaning my lender client got paid and had money left over).

Long story short, the days of reading a foreclosure sale notice to nobody on the courthouse steps are, at least temporarily, over.

I’ve got a sale set tomorrow, September 8, 2022, for a commercial property at 110 Livestock Road, Dickson, Tennessee 37055.

Based on the photos pulled from an old Loopnet listing, it’s right in the “off-interstate” commercial district, behind Bojangles Chicken (please note: my legal description, not these photos, controls what the buyer is buying).

At one point, the owner planned to build and operate a Taco John’s restaurant on the site. A complicated Chapter 11 later, however, and this commercial property is back on selling block.

Let me know if you would like additional information on this. I am the attorney for a creditor involved, and, as a result, I will be limited in what information and guidance that I can provide.

As with all distressed real estate sales, buyer beware, and hire a lawyer.