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.
More Origination Questions
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For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
An MLO provides pre-qualification based on a borrower's current employment but learns the borrower is starting a new job next month with a $10,000 salary increase. How should this information be handled?
An MLO issues a pre-approval letter that states 'subject to satisfactory appraisal and final underwriting approval.' The borrower uses this letter to make an offer, but the appraisal comes in $15,000 below the purchase price. What is the lender's obligation?
A borrower submits a mortgage application on Monday at 2:00 PM. The lender determines the application is complete on Wednesday at 10:00 AM. What is the latest day the Loan Estimate must be delivered to comply with TRID requirements?
How long is a typical pre-approval letter valid?
A borrower requests a rate lock on a construction-to-permanent loan where the construction phase is 8 months and the permanent phase begins immediately after. The lender's rate lock policy allows maximum 120-day locks. How should the MLO handle this situation?
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A lender provides a Loan Estimate on Monday. On Wednesday, the borrower provides additional documentation that reveals the property value is significantly lower than initially stated. When must the lender provide a revised Loan Estimate?
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A borrower received a Loan Estimate on Monday and wants to lock their interest rate. The earliest the MLO can accept the rate lock request is: