Power of sale is the right of the mortgagee to force
the sale of a property without judicial proceeding, should default occur.
Power of sale is the most frequently used method by which a mortgagee (usually a financial institution) will remedy a default by a mortgagor (the borrower/owner). The term, power of sale, indicates a sale under the power contained in the mortgage document or in the Mortgages Act.
The power of sale can often be the fairest,
most inexpensive method to deal with an unpleasant financial circumstance. It allows
the mortgagee/lending institution to retrieve only what it is entitled to and no
more. If there is a surplus, then the owner/mortgagor will benefit. The power
of sale does represent certain complexities, particularly in terms of gaining possession
and the obligation of the mortgagee to obtain the best possible value.
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