<P> A deed of trust has a crucial advantage over a mortgage from the lender's point of view . If the borrower defaults on the loan, the trustee has the power to foreclose on the property on behalf of the beneficiary . In most U.S. states, a deed of trust (but not a mortgage) can contain a special "power of sale" clause that permits the trustee to exercise these powers . Here is the standard conveyance clause from a Freddie Mac "uniform instrument": </P> <Table> <Tr> <Td> "</Td> <Td> Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property...</Td> <Td>" </Td> </Tr> </Table> <Tr> <Td> "</Td> <Td> Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property...</Td> <Td>" </Td> </Tr> <P> In the states that enforce "power of sale" clauses, the courts have uniformly held that by executing a deed of trust with a "power of sale" clause, the owner has authorized the trustee to conduct a nonjudicial foreclosure in the event of default . That is, unlike a mortgage, the lender need not sue the borrower in a state court; instead, the lender / beneficiary merely directs the trustee to mail (or serve, publish, or record) certain notices required by law, culminating in a "trustee's sale" at which the trustee auctions the property to the highest bidder . The borrower's equitable title normally terminates automatically by operation of law (under applicable statutes or case law) at the trustee's sale . The trustee then issues a deed conveying the legal and equitable title to the property in fee simple to the highest bidder . In turn, the successful bidder records the deed and becomes the owner of record . Thus, the advantage of deeds of trust is that the lender can recover the value of the collateral for the loan much more quickly, and without the expense and uncertainty of suing the borrower, which is why lenders overwhelmingly prefer such deeds to mortgages . </P>

A power-of-sale clause will always be a part of a