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Monday, March 26, 2007

Trustee's sale

When a lender sells your property to pay for a mortgage in default.

Most Deed of trust have a "power of sale" clause, giving the trustee, a neutral party who acts on behalf of the lender, the right to a trustee's sale. A trustee's sale varies from state to state, but in general the trustee, typically a title insurance company, advertises the property's sale in a local/count newspaper and then auctions off the property to the highest bidder.

All is not lost, you have up to five days before the sale to pay everything you owe, plus the legal fees incurred by the trustee, to get back your property. Note that some mortgages contain a power of sale clause, giving the lender the right to foreclose without taking you to court first.

See: Foreclosure, Deed of trust

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