Question

Power of sale clause : standard in a deed of trust and allows the non-judicial foreclosure process to be used in case of default

Answer 1

A power of sale clause is a provision in a deed of trust that allows for non-judicial foreclosure in case of default.

Step-by-step explanation:

A power of sale clause is a standard provision found in a deed of trust, which is a type of security instrument used in real estate transactions. This clause allows the lender to initiate a non-judicial foreclosure process in the event of default by the borrower. Non-judicial foreclosure means that the foreclosure process can happen without involving the court system.

For example, if a homeowner fails to make their mortgage payments, the lender can invoke the power of sale clause and sell the property at a public auction to recoup the outstanding debt. This process is generally faster and less costly than a judicial foreclosure, which requires court involvement.