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Mark in St. Louis

Question about Power of Attorney

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Looks like i'll be the first one to post here. thanks for starting this Michael.


Here it goes.


I have a subject-to deal I have the opportunity to sign up. Here's the situation:


The couple is behind about 4 months. They have gotten the letter from the lender saying they are preparing to foreclose (no auction/sale date set yet). They cannot afford to catch it up or make payments any longer. I figure I have about a month before a sale date gets set. Missouri is a Deed of Trust state, so it will be a non-judicial foreclosure. They go fast here....less than a month.


She has already found a new job, out of state, and is moving in 2 weeks. He is an over-the -road truck driver and is gone for 3 weeks at a time. He won't get back from this run until after Thanksgiving. Yes, they plan to abandon the house and let the bank take it.


They are both on the warranty deed, but only the husband is on the deed of trust/mortgage.


I'd like to get this under contract before she takes off (2 weeks). Her husband (who I have been talking to) says she has power of attorney for him (because of his trucking situation).


My question:


Can she sign over the warranty deed (and all my other closing docs for subject-to's) to me using his power of attorney? In other words, can she sign for both of them on all the docs I need....without it coming back to bite me in the A%# :D


As an FYI, on subject-to deals I have them actually place the home in a land trust, with me as trustee, and them as the initial beneficial interest. I then have them sign beneficial interest over to my LLC. The "Warranty Deed To Trustee" is then what I record at the county clerk's office.



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Well Mark, it appears that you’re wandering around in terrain where there are “power of attorney land mines.” Why “land mines?” Because like land mines, you usually don’t know if a power of attorney is going to explode until much later.


That being said, here are a couple of things you should think about.


As we all know, powers of attorney appoint another person to act as an agent of the appointing person. The appointing person is the “principal” and the agent is called the “attorney-in-fact.” Generally, when a principal (in this case the husband) validly appoints an attorney-in-fact (the wife), then acts done by the attorney-in-fact legally bind the principal if the acts were within the authority spelled out in the power of attorney. Remember, powers of attorney can usually be revoked at any time by the principal, either orally or in writing.


So far, so good?


There are special and general powers of attorney. Special powers of attorneys describe in detail what powers the attorney-in-fact may exercise under the power. General powers of attorney allow the attorney-in-fact to act for the principal on every matter that may be handled through an agent (with some exceptions). Still with me?


In addition, some states require that certain powers must be specifically listed in the power of attorney in order for the attorney-in-fact to be able to validly perform the act. For your question, a couple of powers that commonly must be listed may be relevant. These include property rights in which the principal (the husband) might have an interest, and trust agreements. Sound vaguely familiar to your situation?


As if this were not enough, it is common for states to specify powers that cannot be granted through a power of attorney.


Mark, your basic strategy is interesting, but given all factors you may want to hot tail it over to the legal section of the local bookstore and do some reading, or (gulp) your attorney’s office to get some legal advice. I think you’ll sleep better if you do more due diligence on the rules about powers of attorney in your state.


Cheers! :o


Mike Pinkerton

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Thanks for the reply Mike.


I actually have a Pre-Paid Legal membership and free access to an attorney for these types of questions.


So, I'll contact them about any state-specific issues regarding this topic, as you suggested.



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