Reverse Mortage and Power of Attorney - Bad Combo
Just because something is crystal-clear to one individual, doesnt necessarily mean it will make any kind of sense to another.
This is obvious, right? I hear you saying, Tell me something I dont know. Well hang in there partner.
A Power of Attorney for real estate has never been cut-and-dried. People normally have a general power of attorney. The title company forces them to change it to a real estate specific power of attorney.
Typically, the escrow company requirements are just an inconvenience. They dont normally stop the deal.
I had a borrower come to me to get a reverse mortgage in the last several weeks. The borrower was comprised of husband and wife, and mom. The wifes brother has power of attorney for mom, who suffers from dementia.
The husband, wife and mom are all on title. The goal was to take cash out of the home to make some home improvements and pay for medical treatment.
There didnt seem to be an issue initially, but then it reared its ugly head: Title companies no longer issue title insurance when a POA is involved. The Texas Department of Insurance put an end to this.
Now, you have to ask the question, what is the point of the power of attorney in the first place? This is a legal document designed such to accomplish legal matters just as these folks are trying do.
But does it make sense to insurance companies issuing title insurance on real estate? Apparently the answer is no. At least not in Texas.
I dont think it takes a rocket scientist to understand whats going on. Im guessing were seeing a rash of lawsuits between siblings and the title companies issuing title insurance are done with it.
Reality is, even a conservatorship as well as a power of attorney, doesnt seem to help.
There does not seem to be a viable solution to the problem. This is a serious issue for my would-be borrowers. How it works itself out remains to be seen.
This is obvious, right? I hear you saying, Tell me something I dont know. Well hang in there partner.
A Power of Attorney for real estate has never been cut-and-dried. People normally have a general power of attorney. The title company forces them to change it to a real estate specific power of attorney.
Typically, the escrow company requirements are just an inconvenience. They dont normally stop the deal.
I had a borrower come to me to get a reverse mortgage in the last several weeks. The borrower was comprised of husband and wife, and mom. The wifes brother has power of attorney for mom, who suffers from dementia.
The husband, wife and mom are all on title. The goal was to take cash out of the home to make some home improvements and pay for medical treatment.
There didnt seem to be an issue initially, but then it reared its ugly head: Title companies no longer issue title insurance when a POA is involved. The Texas Department of Insurance put an end to this.
Now, you have to ask the question, what is the point of the power of attorney in the first place? This is a legal document designed such to accomplish legal matters just as these folks are trying do.
But does it make sense to insurance companies issuing title insurance on real estate? Apparently the answer is no. At least not in Texas.
I dont think it takes a rocket scientist to understand whats going on. Im guessing were seeing a rash of lawsuits between siblings and the title companies issuing title insurance are done with it.
Reality is, even a conservatorship as well as a power of attorney, doesnt seem to help.
There does not seem to be a viable solution to the problem. This is a serious issue for my would-be borrowers. How it works itself out remains to be seen.
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12:32 PM
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