Legal Definitions - power of sale

Definition: Power of sale refers to the legal right or authorization given to a lender to sell a property without going to court in order to recover the unpaid mortgage debt. It is a clause included in a mortgage agreement that allows the lender to sell the property if the borrower defaults on the loan.

Example: John took out a mortgage to buy a house. The mortgage agreement included a power of sale clause that allowed the lender to sell the property if John failed to make his mortgage payments. Unfortunately, John lost his job and was unable to keep up with his payments. As a result, the lender exercised their power of sale and sold the property to recover the unpaid debt.

This example illustrates how a power of sale clause gives the lender the legal right to sell a property without going to court in order to recover the unpaid mortgage debt.