In California, a deed of trust contains a 'power of sale' clause. What does this clause authorize?
Correct Answer
D) The trustee to sell the property through non-judicial foreclosure if the borrower defaults
The power of sale clause in a California deed of trust authorizes the trustee to conduct a non-judicial foreclosure (trustee's sale) if the trustor defaults. This allows foreclosure without going through the court system, making the process faster and less expensive than judicial foreclosure.
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Related Topics & Key Terms
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Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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