A borrower brings a power of attorney document to closing, allowing their adult child to sign loan documents on their behalf due to a medical emergency. The power of attorney was executed yesterday. What must the settlement agent verify before proceeding?
Correct Answer
B) That the power of attorney specifically grants authority to execute mortgage documents and is legally valid
The settlement agent must verify that the power of attorney specifically grants the authority to execute mortgage documents and meets all legal requirements. General powers of attorney may not include the authority to sign mortgage documents, and the document must be legally valid under state law.
Why This Is the Correct Answer
The settlement agent must verify that the power of attorney specifically grants the authority to execute mortgage documents and meets all legal requirements. General powers of attorney may not include the authority to sign mortgage documents, and the document must be legally valid under state law.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
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A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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