Trustee’s sale

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

Most deed of trusts 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 county newspaper and then auctions off the property to the highest bidder.

All is not lost – you have up to 5 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
Compare: Judicial foreclosure