Power of Sale Foreclosure

There are many people that are unable to pay their mortgages and face the possibility of foreclosure. One of the most common occurrences of foreclosure is by power of sale. This is a process of selling a mortgaged property without the supervision of the courts by the mortgage holder, which is quite commonly a bank or other type of lender. Foreclosure by judicial sale is something that is available in all states across the nation, however power of sale foreclosure is not. When foreclosure by power of sale is available it often tends to be a much easier and faster process than that of a foreclosure by judicial sale.

The majority of states in the US allow for foreclosure by power of sale. During the process the proceeds of the sale of the mortgaged property will first go to the mortgage holder to pay of the mortgage that was taken out on the property. Next the proceeds will go the any other lien holders and eventually to the mortgagor of the property. The process of foreclosure by power of sale technically accomplishes the same thing as judicial sale, although there are many problems that frequently occur during this process that may prove to be undesirable by many of the parties involved.

States Allowing Power of Sale Foreclosure

Currently there are 29 states that allow foreclosure by power of sale including Alabama, Alaska, Arizona, California, Colorado, the District of Columbia, Georgia, Hawaii, Idaho, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wyoming. Visit the Foreclosure Law section to see your States specific laws for foreclosures, timelines, and more.

Advantages

There are many advantages that come from the use of foreclosure by power of sale opposed to other methods such as foreclosure by judicial sale. One of the biggest benefits is that the process involves much less court involvement, which makes the process speedier and a little easier. However there are some disadvantages of foreclosure by power of sale. For instance, in order for this type of foreclosure to take place the mortgage form would have to have allowed for it. Foreclosure by power of sale is often also subject to judicial review later on. Any issues that are revealed will have to be resolved in a court. These are all issues that must be taken into account when involved in a foreclosure by power of sale.

Deed of Trust

One thing that can often affect the ability to utilize a foreclosure by power of sale is not having a deed of trust, as this is required in many different places in order to carry out the process. A deed of trust allows for the property to be transferred from the mortgage holder to a trustee. This is because during a foreclosure the trustee will take care of the sale of the house and not the mortgage holder. This is the reason that many jurisdictions often require a deed of trust before going ahead with the process of a foreclosure by power of sale.