How do you handle a power of attorney closing?

Most POA problems start with timing. Somebody mentions two days before closing that the seller's daughter will be signing, the POA turns out to be a general form from years ago, and now the lender, the underwriter, and the signer are all on the phone. The fix is simple to describe: find out early, get it approved, and write it into the signing instructions.

What is a power of attorney closing?

It's a closing where someone signs on behalf of a buyer, seller, or borrower. The person who gives the authority is the principal. The person who signs for them is the attorney-in-fact, also called the agent. The attorney-in-fact doesn't need to be a lawyer. It's often a spouse, an adult child, or a trusted relative.

When does a POA come up at closing?

• A signer who is deployed or overseas, where a notary can't easily reach them.
• A spouse who can't attend, because of work, travel, or a scheduling conflict.
• An older or ill signer whose family handles their affairs.
• A seller who has already moved away and wants someone local to sign.

If the principal can still sign in front of a notary, ask whether a POA is needed at all. A mail-away closing or RON may mean one less approval on the file.

Who needs to approve the POA before the signing?

Ask about a POA when you open the file, and send a copy for review as soon as you have it. Don't assume that a POA good enough for the bank is good enough for this closing.

• The lender, if there is one. Many lenders limit POA use or set their own rules. Some won't allow one at all, and some want it to name this specific transaction. If the lender rejects it, the attorney-in-fact can't sign the loan documents.
• Your underwriter. Underwriters often ask for more than state law does, especially on older POAs, or when the principal is signing for a trust or company rather than as an individual.
• The closing attorney, in states or on files where one is involved.

Some transactions and states add their own limits. Short sales can be restricted, and Texas has specific rules about where a POA for a home equity loan can be signed. Your underwriter and counsel can tell you what applies to your file.

What should you check in the POA itself?

Your underwriter's checklist comes first. These are the items that tend to hold a file up:

• Names. The principal and attorney-in-fact match the title work, the loan documents, and the ID that will be shown.
• Powers. It actually covers what's happening: selling or buying this property, signing the loan, or both.
• Property. Whether it needs to name the property or include the legal description.
• Date. It was signed before the closing documents, and it isn't so old that the lender or underwriter will balk.
• Execution. It was notarized, and witnessed if the state calls for it, in a form that can be recorded.
• Still in effect. A POA ends when the principal dies, and it can be revoked. Some offices call the principal right before the signing to confirm, and some ask the attorney-in-fact to sign an affidavit. Ask what your underwriter wants.

How should the attorney-in-fact sign?

Use the form your lender or underwriter gives you. A common one puts the principal's name first, then the attorney-in-fact and their capacity:

Jane Doe, by John Doe, her attorney-in-fact

That line goes on every signature in the package, and initials need direction too. Don't leave the notary or the signer to work it out at the table. If the printed signature lines don't reflect the POA, get the documents fixed before they go out. Our guide to notary signing instructions shows where this belongs.

What does the notary do differently at a POA signing?

• They identify the attorney-in-fact, not the principal. The ID has to match the person in the room.
• They complete the notarial certificate to reflect who signed and in what capacity. Some states call for specific wording, so check any pre-printed certificates in the package.
• They follow your signature instructions and call your office if the signer pushes back or something doesn't match.
• They stay out of the legal questions. A notary doesn't decide whether the POA is valid or give advice about it. That's why your review has to be finished before the appointment.

Ask for a scan-back on these files. It lets your team check the signature format the same day, before the originals ship.

What happens to the POA after the signing?

Plan on needing the original. Many title companies want it in hand at or before closing, and a POA used to sell or mortgage real property often gets recorded in the same county as the deed or security instrument, usually ahead of those documents. If the principal is far away, build in shipping time for the POA too, so it doesn't become the last item holding up recording.

When should you slow down?

Most POAs are exactly what they look like, but they're also a tool for fraud against older owners and absent owners. Take it to your underwriter before moving forward when:

• The POA was signed very recently and nobody can reach the principal.
• The attorney-in-fact is pushing to skip steps or close fast.
• The sale proceeds are going to the attorney-in-fact personally.
• The signature, notary details, or dates on the POA look off.

Who handles the signing when the attorney-in-fact is outside your coverage?

The attorney-in-fact often lives somewhere other than the property, which can put the signing past the reach of your roster. A notary signing service like 247 Closers fills that gap: we place a vetted, certified signing agent near the signer, follow your signature instructions, send the scan-back, and ship the originals to you. Your team keeps the file and the POA review. We cover the signing.

Frequently asked questions

AJ

Arron Johnson

Founder of 247 Closers, a nationwide notary signing service staffing vetted, certified signing agents for title agencies.