Power of Attorney (POA) Restrictions: The Requirement for Personal Signatures
Rule
Lendency does not permit the use of a Power of Attorney (POA) for the execution of closing documents. This restriction specifically includes the Personal Guaranty, which must be signed directly by the individual guarantor. Every guarantor and borrower must provide their own signature on all final loan documentation to proceed with funding.
Lendency Insight
In many traditional residential mortgages, a Power of Attorney is a common tool for borrowers who cannot attend a closing. However, in the DSCR space, the Personal Guaranty is the bedrock of the loan’s security. Because this document creates a significant personal financial obligation, our legal and secondary market requirements dictate that the "Principal" (the person being held liable) must be the one to sign it.
Using a POA creates a layer of "legal distance" that can complicate the enforcement of the guarantee. By requiring a direct signature, we ensure there is no ambiguity regarding the guarantor's intent and awareness of the loan terms. If you are planning to be traveling or out of the country during your closing, please coordinate with your settlement agent early to arrange for a remote online notary (RON) or a mobile notary, rather than relying on a POA.
Common Scenarios & FAQs
Can I use a POA if I am traveling abroad? No. Even for international travel, a POA is not acceptable. You will likely need to visit a U.S. Embassy for a notary appointment or use an approved remote signing service where permitted.
Does this apply to the LLC documents too? Yes. Even if you are signing on behalf of an entity (like an LLC), the individual "Managing Member" or "Authorized Signatory" must still sign personally. You cannot have someone else sign your name as "Attorney-in-Fact."
What if I have a "Durable" Power of Attorney? While a Durable POA is a powerful legal tool for many life events, it is still ineligible for use on Lendency closing documents. The guarantor's physical (or verified electronic) signature is mandatory.
Are there any exceptions for medical emergencies? Because these loans are sold on the secondary market, the "No POA" rule is a rigid eligibility requirement. Exceptions are extremely rare and typically result in the loan being ineligible for our standard programs.
Key Definitions
Power of Attorney (POA): A legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal).
Attorney-in-Fact: The person authorized to act on behalf of another under a Power of Attorney.
Personal Guaranty: A legal promise made by an individual to repay a loan if the primary borrower (the entity) defaults.