Power Of Sale
What is '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.
BREAKING DOWN '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.