A Texas home equity package contains a power of attorney letting the lender appear for the owner in any suit on the $95,000 debt. May the lender receive this authority to appear for the owner in a judicial proceeding?
Correct Answer
C) Not permitted: no confession of judgment or power of attorney to appear
The owner may not sign a confession of judgment, or a power of attorney to the lender or a third person to confess judgment or to appear for the owner in a judicial proceeding. Other choices: limiting the power to 1 proceeding is still a power to appear; separate representation at closing does not cure it; and recording the instrument makes a prohibited document public rather than valid. Source: Tex. Const. art. XVI, sec. 50(a)(6)(Q)(iv)
Why This Is the Correct Answer
The owner may not sign a confession of judgment, or a power of attorney to the lender or a third person to confess judgment or to appear for the owner in a judicial proceeding. Other choices: limiting the power to 1 proceeding is still a power to appear; separate representation at closing does not cure it; and recording the instrument makes a prohibited document public rather than valid. Source: Tex. Const. art. XVI, sec. 50(a)(6)(Q)(iv)
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