I suppose I should start out by saying that just because something makes sense to you, doesnt mean it does to someone else.
This is obvious, right? I hear you saying, Tell me something I dont know. Well hang in there partner.
A Power of Attorney has never been straightforward in the real estate business. Typically, an individual will have a general power of attorney, and the title company will make the person switch it to a power of attorney that is exclusively for real estate.
Its a little bit of work, but it all works out in the end.
A new customer of mine, actually a married couple and mother, needed a reverse mortgage recently. It was the brother of the wife who had power of attorney for mother. Mom is mentally incapacitated and cannot sign legally.
On the title are the husband and wife, and of course, mom. The reason for the reverse mortgage was to fix the homes foundation, and to bring in a part time nurse for mom.
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.
To the insurance big-wigs in Texas, issuing title insurance as in the example above wont wash. It doesnt seem fair, but there it is.
I havent called the Texas Department of Insurance, but I can take a wild guess as to what is going on. Huge litigation between family members, and the insurance companies have had enough.
A power of attorney with a legal guardianship wont even make them happy.
Currently there does not appear to be a practical way out of this pickle, and that means serious trouble for my borrowers-to-be. I hope it works out, but for now the conclusion is a mystery.
