In times when a homeowner becomes unable to handle tasks related to their mortgage, a Power of Attorney (POA) may come into play. POA is a legal instrument that allows an authorized person to act on behalf of the borrower to manage the home loan.
At Newrez, we’ve committed ourselves to being there for our borrowers throughout their whole homeownership journey. We’ve provided this guide to help borrowers and their representatives understand this important legal tool. If you need specific guidance about your loan, reach out to a Newrez mortgage expert.
Understanding Power of Attorney
Power of Attorney allows an authorized individual (the “agent”) to handle mortgage matters for the original borrower (the “principal”). This is especially relevant when the borrower is unavailable, incapacitated, or otherwise unable to handle loan servicing tasks directly.
POA Requirements
In order for someone to assume POA on behalf of a borrower, they will have to provide Newrez with:
- A valid, notarized POA document with clear authority to act on mortgage matters.
- The POA must be specific enough to cover the intended actions (e.g., “authority to manage mortgage obligations”).
- In some cases, a durable POA is required. In contrast to a regular POA, a durable POA retains the power to act on the borrower’s behalf even if the borrower becomes incapacitated.
- We may request verification of the principal’s (borrower’s) status (for instance, proof of incapacity or a death certificate).
Common Uses in Mortgage Servicing
Once someone takes up POA for a borrower and becomes their “agent,” they’re typically able to make decisions related to the mortgage that might include:
- Loan modification requests: Negotiating or submitting documents on behalf of the borrower.
- Payment management: Making payments, setting up auto-pay or resolving any delinquency issues.
- Loss mitigation: In cases of hardship, the agent may initiate forbearance or repayment plans.
- Foreclosure prevention: The agent can respond to notices, request reinstatement quotes or pursue alternatives like short sales.
Reach Out to Newrez
If you have specific questions about POA as it applies to your mortgage or that of a loved one, reach out to Newrez at 866-317-2347 and we’ll be glad to discuss next steps.