B8-5-05, Requirements for Use of a Power of Attorney (10/05/2022)

A power of attorney (POA) is a legal document giving one person (described below as the “agent”) the power to legally bind another person. Loans with documentation executed by an agent on behalf of the borrower under a POA are eligible for delivery to Fannie Mae if all requirements referenced in this Guide are met.

When title to mortgaged property is held by a trustee under an inter vivos revocable trust, loan documentation may not be executed using a POA granted by such trustee unless,

• the related trust instrument expressly authorizes the trustee to use a POA to delegate powers to an agent, or

• the agent under the POA is the borrower creating such inter vivos revocable trust.

If a lender determines that it is required by applicable law to accept a POA presented by a borrower, none of the following requirements for, or limitations on, the use of a POA apply. In such cases, the lender must include a written statement in the loan file that explains that determination. Such written statement must be provided to the document custodian with the POA.

*A borrower’s relative includes any person defined as a relative in this Guide, or a person who is an individual engaged to marry the borrower, or is in a legally recognized mutual relationship with the borrower (however denominated under applicable local law).

Additional Conditions

The following are the additional conditions that must be met to qualify for a permitted exception in the table above.

• The POA expressly states an intention to secure a loan not to exceed a stated amount from a named lender on a specific property.

• The POA expressly authorizes the agent to execute the required loan documents on behalf of the borrower.

• In a recorded, interactive session conducted via the internet, and to the satisfaction of the agent, the borrower must

  • confirm their identity;

  • after reviewing the required loan documents, reaffirm their agreement to the terms and conditions of the note and security instrument evidencing the transaction; and

  • reaffirm their agreement to the execution of the loan documents by the agent.

• At Fannie Mae’s request the lender must produce a recording and other documentary media memorializing the entirety of the interactive session. Such request may be at any time during the term of the related loan. The lender must comply within a commercially reasonable time following such request and without additional expense to Fannie Mae.

• If the agent is an employee of the title insurer or is an employee of the policy-issuing agent of the title insurer, then unless unavailable under applicable law, such title insurer must issue a closing protection letter (or similar contractual protection) for the transaction for the policy-issuing agent.