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

A deed of trust with a power of sale is a document that outlines the transfer of property from one person to another. It is commonly used in residential real estate law in Virginia. In a deed of trust with a power of sale, the borrower (the grantor) gives a secured interest in the property to a lender (the beneficiary). The beneficiary is given the power to sell the property if the borrower fails to fulfill their obligation of repayment. The deed of trust creates a lien on the property that the lender can use to collect the debt in the event of a default. The deed of trust is separate from the promissory note, which is the actual loan agreement between the borrower and the lender. The deed of trust does not transfer ownership of the property, but simply serves to secure the loan and outlines the terms of the loan. It will also list the property address, the parties involved, the amount of the loan, the interest rate, and when the loan is due. It may also include provisions for penalty fees in the event of a default. In the event of a default, the lender can initiate foreclosure proceedings. It is important to note that in Virginia, a deed of trust with a power of sale is the only legal way to do this. This means the lender does not need to take the borrower to court in order to foreclose on the property, instead they can simply instruct a trustee to handle the sale.

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