September 11, 2015
We’ve written a lot in recent days about the changes coming to FHA single family loan rules. Come September 14, 2015, a new HUD policy handbook on FHA single-family home loans goes into effect, incorporating updates, revisions and re-statements of existing policy.
Under HUD 4000.1, there are a set of rules about the use of power of attorney in order to advance an FHA home loan.
In our last blog post we discussed using electronic signatures and some basic power of attorney information. FHA loans can be made using a power of attorney under specific circumstances and according to certain procedures. What are those procedures?
According to the rules in HUD 4000.1 (again, which become the official policy as of September 14 2015 unless otherwise stated in the new handbook) we learn the following:
“A Power of Attorney (POA) may not be used unless the Mortgagee verifies and documents that all of the following requirements have been satisfied:
–For military personnel, a POA may only be used for one of the applications (initial or final), but not both:
–When the service member is on overseas duty or on an unaccompanied tour;
–When the Mortgagee is unable to obtain the absent Borrowers signature on the application by mail or via fax; –Where the attorney-in-fact has specific authority to encumber the Property and to obligate the Borrower.”
To use a power of attorney under the circumstances mentioned above, evidence is required:
“Acceptable evidence includes a durable POA specifically designed to survive incapacity and avoid the need for court proceedings.”
For situations specifically involving incapacitated borrowers, “a POA may only be used where a Borrower is incapacitated and unable to sign the mortgage application; the incapacitated individual will occupy the property to be insured, or the Property is being underwritten as an eligible Investment Property; and the attorney-in-fact has specific authority to encumber the Property and to obligate the Borrower.”
Acceptable evidence in these cases is similar to that already mentioned above.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It’s simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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