Fannie Mae and Freddie Mac issued temporary power of attorney (POA) flexibilities due to COVID-19.
The following applies to loans with an application date on or before May 17, 2020, including loans in the pipeline:
- The initial 1003 may now be signed by the attorney-in-fact using a POA in cases where it cannot be personally or electronically signed by the borrower (including using a mailed/delivered copy)
- The POA must reference the property address (no change to current policy)
- Rate/Term Refinance Transactions (limited cash-out):
- A POA is eligible on rate/term refinance transactions; POA ineligible on cash-out transactions
- The POA is not required to be notarized unless:
- Required by applicable state law (determined by title), OR
- The person named as the attorney-in-fact is employed by, represents, or is affiliated with the title insurance company that will be issuing the title insurance policy, AND
- The title insurance company issuing the policy is affiliated with the lender
- Purchase Transactions:
- A POA is eligible on purchase transactions subject to the following:
- The POA must be notarized. A remote notarization is acceptable unless the jurisdiction requires the POA be recorded (determined by title)
- The attorney in fact cannot be any of the following unless they are also a relative of the borrower:
- The property seller, or
- Any person related to the property seller, or
- Any person who is a direct, or indirect employee/agent of the property seller
- The borrower will be required to verbally acknowledge they understand the terms of the transaction and the use of a POA regardless of the relationship of the attorney-in-fact to the borrower (i.e. relative, attorney, interested/un-interested party)
- Homebridge will contact the borrower after the CD has been delivered to discuss the following:
- The loan terms (loan amount, interest rate, first payment date, PITIA payment, etc.), and
- The attorney-in-fact, in signing the documents, is contractually binding the borrower to the transaction
- Homebridge will complete and sign a Certification, which documents the conversation with the borrower and certifies the borrower acknowledged they fully understand the information detailed above.
- Cash-Out Transactions
- Fannie Mae Transactions: POA continues to be ineligible
- Freddie Mac Transactions: A POA continues to be eligible with Homebridge management review and approval however, the POA flexibilities detailed above are not eligible
If you have any questions, please contact your Account Executive.
