For a Fannie Mae purchase, a borrower overseas at the July 14 closing wants her brother to sign the note and security instrument under a power of attorney executed in May. Assume no applicable-law mandatory-acceptance exception. What should be verified before permitting him to sign?
Correct Answer
C) Verify the document and agent meet applicable law, lender, title and Fannie Mae requirements
C. Review the actual authority and transaction requirements before accepting the signature. The program permits eligible transactions signed by an authorized agent. The lender must obtain the document and verify matching names, validity at signing, notarization and the property address. Scope and exceptions: Recording with the security instrument is required where the jurisdiction requires it, not universally. Being a relative does not cure an invalid authorization. An applicable-law obligation to accept a POA has a separate documented exception in the Guide. Source: Overview; General Exception; Eligibility Requirements — https://guide-selling.fanniemae.com/sel/b8-5-05/requirements-use-power-attorney
Why This Is the Correct Answer
C. Review the actual authority and transaction requirements before accepting the signature. The program permits eligible transactions signed by an authorized agent. The lender must obtain the document and verify matching names, validity at signing, notarization and the property address. Scope and exceptions: Recording with the security instrument is required where the jurisdiction requires it, not universally. Being a relative does not cure an invalid authorization. An applicable-law obligation to accept a POA has a separate documented exception in the Guide.
Why the Other Options Are Wrong
Option A: Prohibited outright, as mortgage documents must be signed in person
Authorized-agent execution is not categorically prohibited.
Option B: No issue: a power of attorney is valid for any purpose once it is notarized
Notarization is only one requirement.
Option D: Permitted only where the borrower is on active military deployment
Military deployment is not the sole permitted circumstance.
Exam Tip
A notarized document is not automatically sufficient authority for this closing.
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