What is a deed of trust with a power of sale?

A deed of trust with a power of sale is a type of security instrument used in residential real estate transactions in California. It is used to secure a loan for a property purchase. The deed of trust is the legal document that grants a lender an interest in the property, allowing them to take ownership of it in the event that the borrower does not repay the loan. The power of sale is a clause in the deed of trust that gives the lender the right to sell the property if the borrower defaults on the loan. This clause is included to help the lender recoup the loan and interest that is owed. If a borrower defaults on their loan and the lender exercises the power of sale clause, the property goes to auction and is sold to the highest bidder. Proceeds from the sale are used to pay off the outstanding debt. Deeds of trust with power of sale are commonly used in residential real estate transactions in California and can be beneficial in the event of a loan default. It allows the lender to recover their money quickly, while also protecting the borrower’s rights to the property. While a deed of trust with power of sale is not required for all transactions, lenders may require it for certain loans. In any case, it’s important to understand the terms and conditions of the deed of trust and power of sale clause before signing any documents.

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What is a deed of trust with a power of sale?

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