Also known as: power-of-sale foreclosure sale · power of sale foreclosure · nonjudicial foreclosure · power-of-sale foreclosure
Written by attorneys · grounded in primary & secondary sources — see below
A nonjudicial foreclosure sale conducted by a trustee or mortgagee under a power-of-sale clause in a mortgage or deed of trust together with applicable state statute. The sale terminates the mortgagor's equity of redemption and transfers the property or its value to the purchaser without court supervision. The mortgage or statute controls the required notice, bidding, and redemption procedures.
Prime Rights defaulted on payments secured by a deed of trust containing power-of-sale language. The trustee posted and published the minimum statutory notices, conducted the sale, and accepted Summit Firm's credit bid. Because the sale followed the contractual and statutory power-of-sale procedures, it terminated Prime Rights' equity of redemption and transferred title to Summit Firm.
Gold News defaulted on its mortgage obligation to Pinnacle Content. Pinnacle first verified that all contractual and statutory conditions were satisfied, then authorized First Publishing to commence the nonjudicial sale. The resulting auction transferred the printing facility and equipment to Republic Digital free of Gold News' equity of redemption.
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A power of sale foreclosure sale proceeds without court involvement under the mortgage or deed of trust and state statute, while judicial foreclosure requires a court action. The mortgage or statute dictates notice, sale, and redemption procedures for the power-of-sale method.
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A creditor may commence the sale only after default in the obligation and satisfaction of every condition required by the mortgage agreement and by law.
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No. A regularly conducted power of sale foreclosure sale is not defective solely because the price is low unless the price is grossly inadequate.
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The trustee or other person authorized by the creditor in a record may conduct the sale once default and all required conditions are established.
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