A Specific Power of Attorney (POA) for a mortgage closing is a legal document that allows one person (the principal) to authorize another person (the agent or attorney-in-fact) to act on their behalf only for the purpose of completing a mortgage transaction—typically when the principal cannot be physically present at the closing.
Key Points of How It Works:
✅ Purpose-Specific Authorization
The document limits the agent’s authority strictly to the mortgage transaction, such as signing loan documents, the note, deed of trust, and other closing forms.
It does not grant broad financial powers—only what’s specifically listed.
✅ Common Uses
When the borrower is:
Out of the country or state
In the military
Hospitalized or otherwise unavailable on closing day
✅ Lender and Title Company Approval Required
The lender must approve the POA in advance. Some lenders are strict and may require the POA to be:
Dated close to the closing date
Notarized and possibly recorded
The title company must also approve the document to ensure it's valid and complies with local regulations.
✅ Execution Requirements
It must:
Clearly describe the property address
State the exact powers being granted (e.g., “to execute all documents required to close on the mortgage loan for [property address]”)
Be notarized, and in some states, also witnessed
Sometimes be recorded with the county clerk if it’s used to sign a deed or deed of trust
✅ Expiration
Some are written to expire after a short period (e.g., 30 or 60 days), or immediately after closing.
✅ Revocation
The principal can revoke it at any time before the closing by notifying the agent and any third parties relying on it (like the lender or title company) in writing.
Example Scenario
Suppose Jane is buying a home but will be overseas on the closing date. She signs a Specific POA authorizing her sister to sign all documents necessary to complete the mortgage transaction for the home at 123 Main St. The lender and title company review and approve the POA ahead of time. On the day of closing, Jane's sister signs the documents on her behalf, using the POA.
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