Monthly Archive: August 2012

Aug 05

Power of Attorney Epidemic

POAs in Louisville Kentucky

Just for fun I searched the Jefferson County Clerk’s online database to see how many Power of Attorney documents there are in the public record.  Okay, I can’t count that high, but it is easy to get an idea by searching for a particular time period.  This is how I searched, first, selected to search by Party Name but left the name boxes blank, selected date(s) to search and in the Doc Type box scrolled down to POA.

If you are searching a large time line there are five listings per page, so just add 5 for every click on the Next Page link.  I looked at a recent random week, Monday to Friday and drum roll, there were 214 document tabs.  Each document will have at least two names, so the 214 listings probably represents 107 Power of Attorneys.  It is possible for one individual to name more than one Attorney-in-Fact but most do not.  Now that I think about it, naming more than one individual and requiring both to sign is a good safety measure.

Let’s go with 107 POAs filed in one week.  That means that slightly over 21 people per day signed away some of their rights to another individual.  Many of these were elderly individuals handing over their assets to the care of a child.  Some of them will be ripped off by their own children.  Ask any bank teller, adult children frequently steal money from their parents, it is a dirty little banking secret.  Why don’t you see it in the news every day?  Because the parents refuse to prosecute their children.

That Mushroom Cloud is not a Nuke, it’s POAs

I have been writing about this a lot lately because almost every deal I close one side or the other tries to use a Power of Attorney instead of attending the closing themselves.  It is a very strange phenomenon, why the explosion of POAs this year?  Something has shifted, I have been asked about using a POA more times in the last six months than the previous 20 years combined!

I do not want the mortgage and note signed with a POA, period. With all of the trouble in the last couple of years with the validity of mortgage documents no lender in their right mind wants the borrower to skip signing the note.  That is crazy!

What I think is going on is a combination of several factors that have never coincided in the recent past if ever.  A decrease in property values in some areas, a decrease in the number of qualified buyers, cash flow problems on both sides all add stress to a real estate transaction. Add to that a very high unemployment rate and some people that have jobs are simply scared to miss even an hour of work for something as important as buying a home.