MortgageDocs Blog

Power of Attorney Signing (POA)

POWER OF ATTORNEY SIGNING DEFINED:

In a power of attorney loan signing the notary will witness an agent sign for the loan on behalf of the borrower. A borrower’s physical condition or other incapacity might hinder him or her from being able to sign the paperwork. Therefore, the borrower issues authority to an agent (attorney-in-fact hereinafter called POA) who has the power to manage, dispose of, sell or convey the borrower’s personal or real property.

Since the notary will witness the POA sign, the notary will schedule the appointment to meet the POA. The borrower may or may not be present at the loan signing.

You (the notary) should prepare for the signing by: (1) Verifying the POA was pre-approved by the lender, (2) Informing the POA to have proper ID and a copy of the original signed POA at the signing, and (3) Confirming how the lender prefers the POA to sign, initial, and be notarized.

LENDER APPROVAL:

When the lender has pre-approved a POA can be used for the signing the lender will update the borrower’s signing detail when submitting the request in SignSTAT. The borrower may inform you of a POA when you’re scheduling or confirming the appointment even if nothing was previously mentioned on the signing detail. If this happens, be sure to let us know right away so we can check with the lender that the POA was approved prior to your signing appointment. If the POA verbiage is pre-typed on the loan docs, then you’re safe to assume the POA was pre-approved by the lender (since the lender specifically created the docs to be signed with a POA).

IDENTIFICATION:

You will verify the ID of the POA because your notarizing the signature of the individual acting as POA. Input the ID info in your journal (for those notaries located in a state that requires a journal). It’s not necessary for you to collect the ID info for the borrower since he or she is not signing the loan paperwork. However, do collect a copy of the borrower’s ID if the lender requests it returned with the package.

COLLECT ORIGINAL POA:

The borrower’s signing detail on SignSTAT will specify if you’re required to collect the original POA at the signing and return it with the loan docs. Otherwise check with the lender.

SIGNATURE:

Instruct the person acting with POA to sign exactly as the lender has pre-typed the POA verbiage under the signature line. Sometimes the POA is approved by the lender after the loan docs are already drawn. In this instance, check the borrower’s signing detail on SignSTAT for instruction on how the POA should sign or contact the lender if no specifics are stated.

The POA may have interest to the loan, property, or neither. When the POA is also signing the paperwork as a vested party, the POA will sign his or her own signature line in addition to the borrower’s signature line. Remind the POA to sign exactly as each signature line is printed.

The most widely used form of signature by the POA is:

(NAME OF BORROWER), by (NAME OF POA) attorney-in-fact

Depending on the lender, it may be acceptable for the POA to sign:

(NAME OF BORROWER), by (NAME OF POA) POA

(NAME OF POA) acting on behalf of (NAME OF BORROWER) as POA

(NAME OF BORROWER) by (HIS OR HER) attorney in fact (NAME OF POA)

INITIALS:

Docs that require the borrower to initial must be initialed in the same format as other docs were signed by the POA. Basically the formatting is identical, but the signature is replaced by initials. Using the examples in the SIGNATURE category above, the initials are as follows:

• (BORROWER INITIALS), by (POA INITIALS) atty-in-fact
• (BORROWER INITIALS), by (POA INITIALS) POA
• (POA INITIALS) acting on behalf of (BORROWER INITIALS) as POA
• (BORROWER INITIALS) by (HIS OR HER) atty in fact (POA INITIALS)

NOTARIZATION:

Notarization will vary by state. Check your notary manual or state legislature.

If your state allows or authorizes you to notarize a person’s capacity, you will include the POA capacity on your notary page.

If your state does not allow you to notarize a person’s capacity, you will notarize the individual name(s) only (each person you witness sign).

EXAMPLES:

For the examples below we’ll use the most common signature form (bolded above in the SIGNATURE category). The following names are fictitious and used for example purposes only:
Borrower - Mary Jane Smith
POA - Jack D. Smith
Notary - Sara Lee

Example 1: The POA has no interest in the property or loan, so the POA will only sign and initial on behalf of the borrower.

Example 2: The POA has vested interest in the property, so in addition to signing as POA he must sign his separate signature and initial line.