A borrower's elderly parent wants to provide a gift of $50,000 for the down payment but is unable to sign documents due to dementia. The parent's adult child has power of attorney. What is required for this gift to be acceptable?
Correct Answer
B) The power of attorney must specifically authorize real estate gift transactions
When a gift donor cannot sign due to incapacity, the power of attorney document must specifically grant authority for real estate transactions or gift-giving. A general power of attorney may not be sufficient, and the lender will require verification that the attorney-in-fact has the legal authority to make such gifts.
Why This Is the Correct Answer
When a gift donor cannot sign due to incapacity, the power of attorney document must specifically grant authority for real estate transactions or gift-giving. A general power of attorney may not be sufficient, and the lender will require verification that the attorney-in-fact has the legal authority to make such gifts.
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