Approved Use of Powers of Attorneys

  • If the lender insists on wet-signed documents, why can’t the house-bound borrower just deliver to the issuing agent a Power of Attorney signed via RON and let the agent sign the loan documents? Would that be a conflict of interest or otherwise prohibited?
  • Traditionally, this was not permitted for loans that lenders would then sell to Fannie Mae and Freddie Mac. However, in response to the COVID-19 pandemic, and recognizing that house-bound borrowers were still being required to wet-sign loan packages, the GSE’s liberalized their rules and will now allow for borrowers to deliver their Power of Attorney to the closing agent, who may then sign the loan documents. There are strict rules in place regarding disclosure. Please see The Fund underwriting bulletin for more details issued by Fannie Mae.
  • I thought lenders won’t allow closing agents to sign loan documents with a POA. Is that now allowed?
    Traditionally, this was not allowed but in response to the COVID-19 pandemic, the rules in this regard have been liberalized. See the Fannie Mae Guide for more details.