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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Mortgagee sale

What is a mortgagee sale, and what price does the lender have to get?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A mortgagee sale is the lender's sale of mortgaged property under its power of sale, after the borrower has defaulted and the required notice has run. The lender can choose when to sell but must take reasonable care over the price: in New Zealand, to obtain the best price reasonably obtainable at the time of sale; in England and Wales, the true market value; in Australia, a duty that varies by state. In practice that means proper marketing, an independent valuation and a process the lender could defend, because a borrower or guarantor left with a shortfall will often test it.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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