Also known as: powers of sale · power-of-sale
Written by attorneys · grounded in primary & secondary sources — see below
A contractual provision in a mortgage or deed of trust authorizing the mortgagee or trustee to sell the mortgaged property upon default without judicial proceedings. The mortgage instrument and applicable state statute dictate the required notice, sale procedures, and redemption rights.
Pinnacle Holdings held a mortgage on a warehouse owned by Perry Pratt that contained a power of sale clause. After Pratt missed several payments, Pinnacle directed the trustee to advertise and conduct a public auction. The sale closed without any court filing, and the buyer received a trustee's deed that extinguished Pratt's equity of redemption.
Prosperity Investments held a deed of trust with a power of sale on a farm owned by Paula Pierce. When a state law temporarily halted foreclosure sales during an economic crisis, Prosperity argued the statute impaired its contractual right to sell the property without court action. The court evaluated whether the moratorium unconstitutionally blocked the power of sale remedy.
Select any source to read its text and confirm it supports the definition.
Power-of-sale foreclosure proceeds under the mortgage or deed of trust and state statute without court action. Judicial foreclosure requires a court proceeding to terminate the equity of redemption. The mortgage and statute control notice, sale, and redemption rights in either method.
Supporting sources
Yes. When the mortgage and state statute authorize judicial, strict, and power-of-sale foreclosure, the lender may elect different methods for different parcels under the same mortgage.
Supporting sources
No. A foreclosure sale conducted in compliance with statutory notice requirements is not defective merely because the price is below market value. Gross inadequacy must be shown to overcome the presumption of validity.
Supporting sources
…As to her sister-in-law, however, she merely wished the latter have her house “to live in”, and expressly withheld from her any power of sale. The majority opinion holds that the testatrix violated a rule of law by attempting to restrict the power of the donee to dispose of the real estate. Only by thus striking a portion of the…