What clause in the security deed allows lenders to foreclose non-judicially if the buyer is in default?

The Power-of-Sale Clause is the mechanism in a security deed that permits lenders to foreclose non-judicially when the borrower defaults on the loan. This clause allows the lender to sell the property without going through a lengthy court process. Essentially, it streamlines the foreclosure procedure by allowing the lender to act on the security interest in the property directly, typically by conducting a public sale.

When a borrower fails to meet their obligations, such as missing mortgage payments, the Power-of-Sale Clause ensures that the lender can proceed with the foreclosure process promptly and efficiently, which is often beneficial in protecting the lender's interests. In contrast, other clauses such as the Acceleration Clause may trigger the full amount of the loan to be due upon default, but they do not directly address the non-judicial aspects of foreclosure. The Alienation Clause relates to the transfer of the property, while the Novation Clause involves substituting a new obligation for an old one. Thus, the Power-of-Sale Clause is critical for enabling swift action in case of default.