Power Of Sale

AAA

DEFINITION of 'Power Of Sale'

A clause written into a mortgage authorizing the mortgagee (lender) to sell the property in the event of default, in order to repay the mortgage debt. As a mortgage term, power of sale is equivalent to the term foreclosure.

INVESTOPEDIA EXPLAINS 'Power Of Sale'

The power of sale is language added to a mortgage document that allows the lender to sell the property if the mortgage payments are not met, thereby permitting the lender to repay the mortgage debt. A property that is foreclosed is sold by the lender (usually a bank) in order to recover losses incurred by the loan default.


In addition to a mortgage term, power of sale also refers to the power expressed or implied in a trust agreement permitting the trustee to sell the investments comprising the trust.

RELATED TERMS
  1. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Delinquent Mortgage

    A mortgage for which the borrower has failed to make payments ...
  4. Decree Of Foreclosure And Sale

    A declaration made by a court indicating that a piece of property ...
  5. Deficiency Judgment

    A judgment made by a court against a debtor indicating that the ...
  6. Forbearance

    A temporary postponement of mortgage payments.
Related Articles
  1. Short Sell Your Home To Avoid Foreclosure
    Options & Futures

    Short Sell Your Home To Avoid Foreclosure

  2. Avoiding Foreclosure Scams
    Personal Finance

    Avoiding Foreclosure Scams

  3. Are You Living Too Close To The Edge?
    Budgeting

    Are You Living Too Close To The Edge?

  4. Avoid Foreclosure: How To Handle An ...
    Options & Futures

    Avoid Foreclosure: How To Handle An ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center