Monday, February 15, 2016

Power of Attorney in Signing Loan Documents

A Power of Attorney is a written document authorizing one person to act on another person’s or entity’s behalf as agent or Attorney-in-Fact (AIF). When performing a loan signing, a document may be signed any number of ways by the signer, but the lender dictates how it should be signed.  Notary signing agents must always refer to the hiring entity with questions on how to sign loan documents using a power of attorney.

Generally speaking, the following rules apply in Texas when Borrower(s) sign using POA documents and signatures.  (These rules may also apply in other states, but I haven’t checked thoroughly to see.)

You may never get to see the actual power of attorney document, but before you see the loan documents, the lender, its attorney, or the title company checks to make sure of the following five items.  If you are in a state in which the notary public administrator suggests that you view the power of attorney, please follow their instructions.

1. The power of attorney must be signed by the Borrower(s) and name must match Borrower(s) name on the Note. 
2. The power of attorney must state the name of the designated AIF.
3. The designated AIF must be the same person signing the Note on behalf of the Borrower(s).
4. The effective date of the power of attorney must be the day of or before the date of the Note (cannot be dated after Note date).
5. The power of attorney must be property notarized. The signature of an Attorney-in-Fact (AIF) is acceptable as long as “Attorney-in-Fact” (AIF) or “Power of Attorney” (POA) is indicated beside the AIF’s printed or signed name and an acceptable matching power of attorney document is received.

ACCEPTABLE SIGNATURES AND SIGNATURE LINES
May Bird as Attorney-in-Fact for Benny Brown pursuant to POA dated XX xx, XXXX
Benny Brown

Benny Brown by May Bird, Attorney-in-Fact (or POA)
Benny Brown

Benny Brown by May Bird, Attorney-in-Fact (or POA)
Benny Brown, by May Bird as his Attorney-in-Fact (or POA)

May Bird, Attorney-in-Fact for Benny Brown
Benny Brown by May Bird as his Attorney-in-Fact (or POA)

May Bird, Attorney-in-Fact (or POA)
Benny Brown

PROBABLY OKAY
Benny Brown by May Bird*
Benny Brown, by May Bird as his Attorney-in-Fact (or POA)

May Bird*
Benny Brown, by May Bird as his Attorney-in-Fact (or POA)

*(It isn’t always required to state AIF or POA on the signature line, but is generally required by lenders or their legal counsel.)

UNACCEPTABLE SIGNATURES AND SIGNATURE LINES
May Bird
Chris Williams

May Bird
May Bird, Attorney-in-Fact

Benny Brown
Benny Brown by: May Bird, Attorney-in-Fact


This is the preferred language for acknowledgments for individuals using a power of attorney:

STATE OF TEXAS                 
COUNTY OF HARRIS             

This instrument was acknowledged before me on the day of, ______________ by MAY BIRD as attorney-in-fact for BENNY BROWN.

_________________________________
Notary Public, State of Texas
Name Printed:
Comm. Expires: 

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