Power of Sale Clause

A provision in the mortgage deed that allows the lender to sell the property upon the borrower's default on his or her obligation, without a foreclosure suit. This is common with deeds of trust or in title theory states. The lender simply delivers and records a notice of default, and then sells the property at auction. If the selling price is insufficient, the lender may further sue for a deficiency judgment. Similar to the deed in lieu of foreclosure , this is a form of non-judicial foreclosure . For more information, see the "Mortgage Deed and Promissory Note" and "Everything You Need to Know About Foreclosures" articles in the "Real Estate In-Depth" section.

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