West Virginia Mortgage Law Practice Test

A power of sale clause allows a lender to sell the mortgaged property without going through a court process if the borrower defaults on the mortgage. This means that the lender has the authority to sell the property directly, generally through a foreclosure process defined by state law, rather than having to file a lawsuit to obtain possession of the property.

By including this clause, the lender simplifies the process of recouping losses in the event of default. As a result, the borrower essentially loses their right to the property without the necessity of a court action, making the process faster and less formal than traditional foreclosure that requires court involvement. Such clauses are intended to expedite the resolution when borrowers fall behind on their payments, minimizing delays and additional costs for the lender.

In contrast, the other options do not accurately reflect the nature of a power of sale clause. For instance, the requirement for court action (the first choice) contradicts the purpose of a power of sale, while automatic forfeiture after a specified time (the third choice) and penalties for quick sales (the fourth choice) are not standard legal consequences related to this clause. Hence, the correct choice clearly highlights the immediate impact of a power of sale clause on the borrower's rights in the context