Our credit union member is refinancing his home, and his daughter claims to have power of attorney. Should I be concerned?
Yes. You should be concerned at the time of the first contact. There are many types of documents giving individuals powers of attorney. Powers can be limited, unlimited, for healthcare, specific, general, durable or springing. Of importance to the loan officer is whether the specific authority to refinance the property is contained in the document. Once you know that there is a document called a Power of Attorney, obtain a copy and show it to us at the title agency. The Attorney in Fact is the person obtaining the power. The Power of Attorney is the title of the document as well as the power itself. The document must give specific powers to refinance or sell the home. The Power of Attorney must be filed with the county recorder before any deed or mortgage from an attorney-in-fact. Here is a simple example of the type of language the title insurance agent would be looking for to approve a sale, purchase or refinance by the member of the credit union:
Power of Attorney
That the undersigned Joe Smith, does hereby make, constitute and appoint as his lawful attorney in fact Sally Smith, whose address is _________________________________ for him and in his name and stead to purchase, close and finance, relative to the purchase of the property described as follows:
See legal description attached hereto and made a part hereof as Exhibit A
Address: 111 Main Street, Nicetown, OH 44444
The attorney in fact is hereby authorized to execute and deliver all documents in connection with the closing including, without limiting the generality hereof, purchase agreement, mortgage deeds, promissory notes, closing statements, waivers, truth in lending statements, affidavits, check endorsements and Federal Housing Administration and Veteran’s Administration closing documents if appropriate, giving and granting unto said attorney in fact full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as I might or could do if personally present, with full power of substitution and revocation; hereby ratifying all that my attorney in fact shall do, or cause to be done, by virtue hereof.
This power shall not be affected by my disability. This power shall terminate upon the closing of the transaction pertaining to the purchase of the premises described above.
The above document gives specific power to refinance or sell to a definite person. It mentions the real estate involved. Finally, it grants those powers even if the grantor later becomes disabled.
How do I notarize the signature of an Attorney in Fact?
The document must indicate that it is being given by the person granting the power and that the person signing it is an Attorney in Fact. When you fill out the acknowledgment form it should look something like this:
Executed on this 15th day of June, 2011.
Sally Smith, Attorney in Fact for Joe Smith
STATE OF OHIO
COUNTY OF Cuyahoga)
Before me a Notary Public in and for said State, personally appeared the above named Sally Smith, Attorney in Fact for Joe Smith, who acknowledged that she did sign the forgoing document and that the same is her free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my name and official seal at Cleveland, Ohio, this 15th day of June, 2011.
Joe Notary Notary Public
My Commission Expires________
I have been approached by a credit union member whose husband still appears as the homeowner on the tax duplicate. The credit union member is deceased. Will this be a problem?
If the decedent is the last owner of record, there may be problems in clearing title before the sale or refinance. The decedent may have been a joint owner with the right of survivorship given to the member. Or the member may be a beneficiary of a Transfer on Death Affidavit. In either case proper documentation must be filed with the county before the sale or refinance.
If there was no survivorship aspect to the ownership, a case might not be opened yet in probate court,a case may be opened and pending or, the case might be closed without the completion of all of the work necessary before the transfer of the property.
In some cases, a title company will not be able to insure a new owner or the lender without funds being held or indemnification from your customer. Money may need to be held in escrow pending completion of the estate.
Estates may be complex and recognizing the problem early and bringing it to the attention of the title agent can save time when it is time to close the loan.