Stage 1 of 4 · The Paperwork Behind the Loan
Power of Sale
The clause in a deed of trust that lets the trustee sell the property at auction after a default, without filing a lawsuit.
- In plain English
- Power of sale is permission granted in advance. By signing, the borrower agrees that if payments stop, the trustee may sell the house through a set notice procedure rather than a court case.
- Example
- A California deed of trust contains the clause, so the lender never files suit; it instructs the trustee to start the notice clock instead.
- Why it matters
- It is the single feature that makes nonjudicial foreclosure possible, and it is why the whole process can run in a matter of months rather than years.
- Remember it as
- You signed the auction into existence.
Where it lands in the timeline
Stage 1: The Paperwork Behind the Loan
Every foreclosure is already written into the papers signed at closing, so this phase reads the fine print before the fine print reads you.