What's a Power of Sale?
The 'power of sale' is the right of the
mortgagee to force the sale of a property without judicial proceeding,
should default occur. This is the most frequently used method by which
a mortgagee (usually a financial institution) will remedy a default
by a mortgagor (the borrower/owner). The term power of sale indicates
a sale under the power contained in the mortgage document or in the
The power of sale can often be the
fairest, most inexpensive method to deal with an unpleasant financial
circumstance. It allows the mortgagee/lending institution to retrieve
only what it's entitled to and no more. If there is a surplus,
then the owner/mortgagor will benefit. The power of sale represents
certain complexities, particularly in terms of gaining possession and
the obligation of the mortgagee to obtain the best possible value.