A legal document that allows a designated individual to sign final loan documents on a borrower's behalf.
A Power of Attorney (POA) is a legal document that allows a designated individual to sign final loan documents on a borrower's behalf. The document gives one person (called an “agent” or “attorney-in-fact”) the power to act for another person (the principal). In layman’s terms, this means the agent can sign official documents for the principal.
Many elderly people will give one of their children Power of Attorney, for example. We use POAs if one person needs to sign loan documents on behalf of another person. This usually occurs when one borrower is going out of town/country and we don’t want to delay escrow.
We need to set up a “specific” Power of Attorney – i.e., one that references the property and has an expiration date. We cannot use a general Power of Attorney that has already been established; one must be specifically created for the transaction. Escrow will prepare the Power of Attorney form, and then the agent and the principal need to sign it in front of a notary. A power of attorney can only be used to sign the closing documents. It can’t be used throughout to sign initial loan disclosures.