Power Of Sale

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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.

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