Lender Responsibility: New Durable Powers of Attorney, Part One

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It’s a good time to remind our followers about requirements regarding accepting or refusing durable powers of attorney.  First, we’ll tackle time periods, computing business days, and unintentional acceptance of a durable power of attorney.  If you want to read the entire article, head to our Resources page and use the search terms ‘durable powers of attorney’ for our Clients and Friends memos on the topic.

Time Period Recap

  • A mortgage lender has 10 business days to accept or reject a durable power of attorney presented for acceptance by either the principal or the agent unless this period is extended.
  • To extend the 10-business day period, a lender may request the agent’s certification regarding the validity of, and the agent’s authority under, the durable power of attorney not later than the 10th business day. Once the lender has received the agent’s certification, the lender has seven business days to accept or reject the durable power of attorney.
  • We advise that an agent’s certification always be requested because it may be conclusively relied upon by the mortgage lender.
  • For non-English durable power of attorney, the requirements are a bit different: to extend the 10-business day period, an English translation must be requested no later than the fifth business day after it is presented.  In this case, the durable power of attorney is not considered presented for acceptance until the date when the translation is received.
  • We advise not requesting an agent’s certification until after receipt of the English translation is received – in order to extend the period allowed to accept or reject the power of attorney.
  • Note that the principal or agent presenting a durable power of attorney for acceptance and the mortgage lender may agree to extend a time period prescribed here. No format for the agreement or time period for the agreement is specified, but we advise that the agreement be in writing, dated, and signed by both parties before the end of the original 10-business day period.

Computing Business Days

Business day is not defined in the Estates Code and §21,002(a) thereof provides that Chapter 311, Government Code, applies to the construction of a provision in the Estates Code, except for Estate Code Sections not applicable to durable powers of attorney.

  • Therefore, in computing business days for accepting or rejecting a durable power of attorney, exclude the first day and include the last day, and if the last day is a Saturday, Sunday, or legal holiday, extend the period to include the next day that is not a Saturday, Sunday, or legal holiday (§311.014 (Computation of Time) Government Code).

Unintentional Acceptance of a Durable Power of Attorney

  • A durable power of attorney is considered accepted on the first day the mortgage lender agrees to act at the agent’s direction under the power of attorney.
  • We advise mortgage lenders to implement procedures to avoid an unintentional acceptance of the power of attorney before a decision has been made to accept or reject it.

As always, we’re happy to provide clarity and answer questions on these and other topics.