Power of Attorney Guidelines

American Financial Resources, Inc. (“AFR”) permits the use of approved Power of Attorney  (“POA”) legal documents at Closing, except in cash-out refinance transactions. The POA must satisfy all AFR requirements set forth below, as well as, applicable state law and the Government/Agency requirements for the specific loan types.

NOTE:  All POA documents must be reviewed and approved by AFR Legal / Title Review team.  This process may take up to 48 hours.  It is recommended a draft POA is submitted to TitleReview@afrcorp.com, well in advance of the scheduled closing date, to allow ample time for review and corrections, if applicable.  AFR does not permit exceptions on POA documents.  Please review and adhere to the guidance below.

View/Download a PDF version of POA Guidelines

Links to the applicable Government/Agency guidelines are provided at the end of this document

• Power of Attorney is the term used to name the authorized Attorney-in-Fact.
• Agent/Attorney-in-Fact is the term used to describe the person who is signing on behalf of the borrower(s).

• As to not create extra work for the Borrower(s), it is strongly suggested that the Power of Attorney be reviewed and approved by AFR and the title company prior to the Applicant signing the document.
• All Powers of Attorney must be provided to AFR for review and approval as soon as possible. All Required documentation must be submitted no later than 48 hours prior to the anticipated closing.
• The Powers of Attorney must also be reviewed and approved by the title insurance company and/or closing agent insuring the mortgage transaction. AFR must get written confirmation that the title company and/or closing agent has approved the Power of Attorney prior to the scheduling of the closing.
• When the Power of Attorney is submitted for approval, an attestation or  letter of explanation must also be submitted explaining the hardship that is preventing the borrower(s) from executing the requisite documents in person, by electronic signature or through other legal means.  The hardship must be  due to a medical emergency, natural disaster, military deployment and/or other significant hardship, and be signed by the Borrower(s).
• A Power of Attorney may not be utilized in a Cash-Out Refinance Transaction.
  Exception: Military personnel, using a Military Power of Attorney, deployed abroad where permitted by the applicable financing program. Proof must be submitted verifying deployment abroad. This exception granted at AFR’s discretion.
• The name of the Principal (person giving the Agent/Attorney-In-Fact the power to sign documents) in the Power of Attorney must be exactly the same name as the Owner vested on title and the Borrower named in the loan documents.
• State issued identification is required to be produced at closing by the Agent/Attorney-In-Fact appointed in the Power of Attorney and the name(s) on the State issued identification must match the name(s) on the Power of Attorney.
• The Power of Attorney must be dated such that it was valid at the time the affected loan documents were executed.
• The Power of Attorney may not be amended or changed in any way after the document has been executed by the Principal and acknowledged/notarized by the notary. If the Power of Attorney is amended after the document has been executed by the Principal and acknowledged/notarized by the notary, the Power of Attorney must be re-executed by the Principal and re-notarized.
• The Power of Attorney must nominate an attorney-at-law OR an immediate family member/relative to act on the Principal’s behalf.
  *Immediate family member/relative is defined as a borrower’s spouse, child, or other legal dependent, or by any other individual who is related to the borrower by blood, marriage, adoption or legal guardianship, or civil union partner.
• An attorney nominated within the Power of Attorney may not be the attorney handling the settlement of the transaction.
• The Principal and the Agent/Attorney-In-Fact must be at least 18 years of age.
• The Principal and the Agent/Attorney-In-Fact must be mentally competent.
• Each Borrower must have his/her own separate Power of Attorney appointing an Attorney-in-Fact.
• The Power of Attorney may not name more than one (1) Agent/Attorney-In-Fact.
• A Powers of Attorney may not be used when the property is closing in a Trust.
• An Agent/Attorney-In-Fact may not delegate authority granted to him/her under the Power of Attorney to a third-party.
• Powers of Attorney executed outside the United States must be acknowledged/ notarized by Consular Officials at the U.S. Embassy or Consulate located in that foreign country.
• A Power of Attorney is not permitted in connection with a Freddie Mac Texas Section 50(a)(6) mortgage loan.

1. Declare that the Power of Attorney is specific to the transaction and property (must specifically reference the legal description and street address. The legal description must match, exactly, the legal description in the title commitment & the street address (known as address) must match, exactly, the address on the appraisal and homeowner’s insurance binder)
2. Provide the clear purpose for the transaction, e.g. purchase, refinance, etc;
3. State the relationship between the Principal (borrower) and Attorney-in-Fact;
4. Contain the name and address of the Principal (borrower) and the Agent / Attorney-In-Fact;
5. Contain the name of the Lender (as set forth on the note and security instrument);
6. Contain a loan amount.  It is suggested that it is prepared using  language to avoid a specific loan amount, should the loan amount be adjusted after execution.  For example, “amount not to exceed $_________” The amount set forth in this section should be in reasonable proximity to the actual loan amount. The actual loan amount must be within $5,000 of the “amount not to exceed” amount.  PLEASE NOTE: If a specific loan amount is used and the loan amount changes, the POA is null and void and will have to be revised and re-executed and notarized, hence the suggestion for the range;
7. Provide that the Power of Attorney document will expire/terminate on a date specific or a maximum of ninety (90) days from the date of the Power of Attorney;
8. Declare that the Agent / Attorney-In-Fact has the full power to convey or mortgage the subject real property;
9. Contain following exact verbiage from the paragraphs below:
   1. This specific Power of Attorney shall not be affected by any physical or mental disability that I may suffer except as provided by statute and shall be exercisable from this date. All acts done by my attorney-in-fact pursuant to this power shall bind me, my heirs, devises, and personal representatives. This specific power of attorney is non-delegable.
   2. I authorize my Attorney-in-Fact to endorse, sign, seal, execute and deliver and any and all mortgages for the lender, deeds of trust, deed of trust notes, notes or bonds, financing statements, checks, drafts or other negotiable instruments and other written instrument(s) or document(s) of whatever kind reasonably required to effectuate this loan.
   3. I also authorize my Attorney-in-Fact, when appropriate, to execute in my name and behalf such papers and documents s may be required to obtain and consummate a mortgage loan closing including, but not limited to, mortgage loans guaranteed and /or insured, or otherwise, and to execute such documents as may be required, and to execute loan settlement statements, certifications of occupancy, statements required by the federal Truth-in-Lending law or Real Estate Settlement Procedures Act, and any and all other papers necessary or proper to obtain and consummate said loan.
10. Two formal reviews:
    • Initial Approval: To confirm the POA is in executable form.
    • Final Approval: To confirm no changes were made to the signed, witnessed, and notarized POA.

For VA loans, the Power of Attorney must also encompass the following elements:

• Entitlement – A clear intention to use all or a specified amount of entitlement.
• Occupancy – The veteran’s intention to use the property as a home to be occupied by the veteran.

At closing, the settlement agent/closer must be satisfied after sufficient inquiry that Principal is alive, and if on active duty, not missing in action (MIA) and that the Power of Attorney has not been revoked by the Principal.

Pursuant to 10 U.S.C. §1044 (a), Military Powers of Attorney may be used by any of the following:

• Members of any of the armed forces.
• Other persons eligible for legal assistance under the provisions of section 1044 of this title or regulations of the Department of Defense.
• Persons serving with, employed by, or accompanying the armed forces outside the United States and outside the Commonwealth of Puerto Rico, Guam, and the Virgin Islands.
• Other persons subject to the Uniform Code of Military Justice (chapter 47 of this title) outside the United States.

Pursuant to 10 U.S.C. §1044 (b), the following persons have the general powers of a notary public and of a consul of the United States in the performance of all notarial acts relative to a Power of Attorney: