BETTER CHECK WITH THE BUYER'S MORTGAGE COMPANY. You may be thwarted.
Many agents or brokers have assisted their buyer or seller clients complete a purchase or sale of a property. Over the years, I've signed for many home buyers and one seller as their Attorney In Fact.
Inspired by a timely article by Donna Harris in her helpful article - Texas Real Estate - Do I Need to be in Town to Sign My Documents?
MORTGAGE COMPANY SURPRISE. This month, I've been unable to complete a purchase for a buyer client located in Hawaii. When the Power of Attorney document, which is signed by the buyer and recorded in the land records was approved by the mortgage company, they surprised the title attorney when they said that I, the buyer's broker, couldn't be their attorney in fact. The buyer's mortgage company requires that the POA be a disinterested party. They consider me, the Buyer's Broker, a party of interest.
Inconvenience in the extreme. The alternatives to signing for the out of town buyers by a Power of Attorney are mailing the documents (Hawaii is 2 days) to the buyers which is difficult due to the timing of funding, document preparation, distance, etc. The buyers could also retain the services of a local title office for signing, therefore incurring additional expense, inconvenience and the stress of getting the docs back to the closing office. The only sensible way for these closings is for the buyer's agent or broker to do what I've done many times and for many, many years, sign for the buyers as their attorney in fact.
The MORTGAGE COMPANY turned the ROUTINE into a BARRIER . The title attorney for this sale was as surprised as I to learn of this mortgage company limitation. The title attorney has agents closing for buyers as their POA on a regular basis. Clearly, this is a policy of this particular mortgage company.
BEWARE of mortgage company overlays or company policy that may limit the buyer's ability to complete a sale. Other mortgage company overlays that I've experienced are. . . .
1. higher than average minimum credit scores for particular mortgage instruments.
2. mortgage company policy that deducts VA lender fees from seller contribution to buyers.
3. limitations to Power of Attorney.
There are probably others that don't immediately come to mind. If any ActiveRain folks know of additional lender limitations to standard practices, please post them so we can all benefit from your experience.
I have retained the services of a local self employed non-interested party for the closing. The POA docs will go to the buyer for his signature. All should go well. However, due to the extreme inconvenience introduced by the mortgage company, the matter will not be over until closing is complete.
Needless to say, this is a question that I'll be asking of all loan officers in the future.
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75 Comments on Planning A Settlement With A POWER OF ATTORNEY? Be Very Careful.
Well, that's too bad. As you say, one less mortgage company to recommend!
If the buyers didn't trust you, they would not have signed the POA. Seems like they should have the right to make that decision.
Lenn, great post. The range in comments certainly point to a few things... that real estate is local, that there really are no absolutes, and that the mortgage company was very negligent in not notifying you of their policy well in advance. I wonder if the loan officer knew about it and did nothing.. or if he/she was blissfully unaware of his company's policy.
I've signed for my clients with a POA (just used one today, as a matter of fact). There are so many more areas that could snare someone who is being fradulent that this is just one more area in which to exercise caution BUT, as REALTORS, we should exercise caution in all aspects of our business.
we all need to prepare...because of the increase in fraud, mortgage companies and title companies will be tightening the entire process
I can understand the banks position, but it would have been nice to know in advance.
Just a follow up I have used POA's to assist with short sales but never at the closing table.
Greg. Normally, getting the package out to a buyer is logical. However, I got "pushback" from the loan officer about the timing in this case because the buyers are in Hawaii, a 2 day each way express mail.
Loreena. Where is the conflict of interest??? I'm not the buyer nor the seller. Docs are prepared by a licensed attorney at the instructions of the lender. I don't benefit from signing for the buyer.
Gary. That's precisely why it makes sense for the buyer's agent to do it.
Tom. The mortgage company approved the POA, just not my signing. Claimed I was a party of interest. I'm not. I'm a broker, not a buyer or seller.
Tom. My point too.
Carla. The lender approved the POA, just not me.
Kate. There was no oversight. Just an arbitrary decision on the part of the lender.
Linda. If I were a buyer or seller, that would make sense. I'm not.
Brenda. What could go wrong???
Justin. The title company looked into every conceivable alternative. The mortgage company was the barrier.
Endre. You cannot e-mail an original signature. Hawaii is 2 days each way by FedEx. The title company explored all of that.
Tammie. Risk of what??????????????????????????????
George. Sadly, I have a list of "overlays" I have to inquire about when interviewing lenders now. Sad, sad. They add absolutely nothing to the transaction.
Myrl. You bet it could. Military folks are familiar with POA. I'd surely never send a military borrower to a mortgage company that wouldn't permit me to be their POA.
Nogui. Good for you.
Lou. With respect to what???
Frank and Sharon. HA! Which is why I posted it.
Joan. BINGO! They get the loan application, issue the pre-approval and then, once they have the buyer, they don't care.
Chuck. That process is an alternative the title company suggested. Problem is that the buyer will be on travel that week.
Pamela. My pleasure. There is no such restriction here.
Caterina. This is the first time I've not been permitted to be the POA for a buyer client.
Chris. All makes sense. However, "overnight" is 2 days to Hawaii, the buyers will be on travel and the mortgage company has to fund, get instructions to the title company, etc., etc. The logical solution is for me, their broker, to be the POA.
Michael S. YOU ARE SPOT ON. We have plenty of time to get the POA to the buyer for signature in front of a notary and recording. What we DO NOT HAVE is access to the buyer within the time window of the LENDER to get the docs to them for signing.
Dan. That was my idea too. Sadly, settlement is on the 29th and a busy day for local attorneys. As it worked out, I finally, AFTER 2 WEEKS, found a local paralegal who is going to be the POA. However, it was totally unnecessary except for the monkey wrench introduced by the lender.
Kathy. What liability??? They know no-one here. They are relocating. The only person they know is me.
Kunny. HA! I started the process the day after ratification. Early enough??? I hand delivered the docs to the title attorney and he sent the POA to the lender 2 days later with plenty of time to get it to the buyers and recorded. We know the process and allowed plenty of time. The lender approved the POA, just not me.
Rene. Buyers in MD and VA rarely have attorneys. Their real estate agent/broker handles everything for them.
Barbara. Why not??
Jeff. I understand that CA is different. This sale is in VA. I would appreciate hearing what your atty says.
Patricia. My pleasure.
Mike B. WHAT QUESTIONS??????
Raymond.
I agree 100% with Jeff. If an Agent has a financial involvement, they shouldn't be signing.
I have no financial involvement in the purchase or sale. If I was a buyer or seller, that would have been disclosed and I couldn't be my own POA. That is understood but not the situation.
And Karen is incorrect - it is the Lenders business.
No one said it wasn't the lender's business. They approved the POA.
If Agents don't like it, they don't have to do business with the Lender. But Prospect has the best interest rates right now, so you may be doing your client a disservice by encouraging them to use somebody else, simply because you don't like one of their overlays.
RIGHT! I WILL NOT REFER BUYERS TO PROSPECT IN THE FUTURE. Prospect's rates are good but matched by many local lenders in my network.
I HAVE NOT ENCOURAGED THE BUYERS TO USE ANYONE ELSE. That would be a hardship on the borrowers.
You have assumed a lot which is not true. When the lender rejected me as the POA, I did the work to find an acceptable POA, which I finally, after 2 weeks did.
Your hostility to me is palpable. Have you thought about service to the buyer/borrower???
This isn't a notary matter. That's an obfuscation.
THERE IS NO LAW OR REGULATION THAT PRECLUDES ME FROM CLOSING A SALE FOR A BUYER BY POA.
Gretchen. THANK YOU for writing of your experience, which gives good service to our military. I am totally on board with these procedures.
Tni. I have no problem with this traditional and acceptable procedure.
Lyn. Fine. I would.
Tim B. BINGO!!
Marte. Not only do the buyers trust me, I'm the only person here that they even know.
Monica. Thanks for your thoughtful comment and your experience.
Paddy. HA! Let the crooks go on with their business and get tough with entities in an honest transaction.
Gene. IT WOULD HAVE, WOULDN'T IT?????
Chuck. Thanks. What's the difference???
>>No one said it wasn't the lender's business.
You're incorrect, Lenn, Karen said the following: "I'm always surprised when lenders decide things like this. They have no business caring who a buyer/seller trusts to sign."
>>I have no financial involvement in the purchase or sale.
How can the Buyers Broker have no financial involement? How could I possibly misinterpret that?
>>Your hostility to me is palpable.
There's no hostility - I'm simply commenting as I see it. That's what we're suppose to do. Don't take it personal, it wasn't meant that way.
>>You have assumed a lot which is not true..
I haven't made any assumptions. I read your post, and commented accordingly.
Raymond.
Correction: I DID NOT SAY THAT IT WAS NONE OF THE LENDER'S BUSINESS.
That said, there's more merit to what Karen wrote than meets the eye.
Hi Lenn, so very true. With a lot of retirees and heirs we run into this quite often.
Bob. I'm sure. I've been "running into it" for over 25 years and never had a problem until this lender.
Phew!.............when this deal is behind you I'd be saying Aloha Hawaii. Here I come. Great info as usual Lenn my favorite AR mentor. I've learned so much from you over the years that has kept me from stepping all over it. Mahalo! :) I just love doing that
BTW, I must confess. That's not me:). I really like doing that. Beats LOL all to Hell!
John. I thought that was you. I was thinking, WOW, what a hunk.
Lenn, had the same thing happen to me. I have done POA in the past and on my last one I was also told that I was not able to sign because I had a financial interest in the transaction. Some times you just have to wonder if there will ever come a time when things are uniform.
Marnie. That was the rationalle in my case. However, they couldn't cite a guideline to that decision. It is clearly company policy.
My point in this mater is that, when a mortgage company has a policy in addition to guidelines, they should be disclosed prior to taking an loan applicaiton.
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