Glossary

Power-of-Sale Foreclosure

Also known as: Non-Judicial Foreclosure, Trustee's Sale

A non-judicial foreclosure process authorized by a power-of-sale clause in a deed of trust, allowing a trustee to sell the property at a public auction upon borrower default without filing a lawsuit or obtaining prior court approval.

Power-of-sale foreclosure is available only in states that recognize the deed of trust as a security instrument (as opposed to a traditional mortgage) and that have enacted statutes authorizing this streamlined process, which typically requires the trustee to follow specific statutory notice, publication, and waiting-period requirements even though no court is involved. Because it avoids the time and expense of litigation, power-of-sale foreclosure is significantly faster than judicial foreclosure — often completing in a matter of months — which is a meaningful factor in loan pricing and workout strategy in states where it is available. Strict compliance with the statutory notice and procedural requirements remains essential despite the absence of court oversight, since a defective non-judicial foreclosure sale can be set aside by a court after the fact if the borrower successfully challenges the process.