Abuse of Limited Power of Attorney
The growing use of Limited Power of Attorney can open door for “scam artisis” to victimize homeowners and borrowers. The Limited Power of Attorney (LPOA) is an agreement giving a designated individual the authority to sign documents relating to a specific real estate transaction.
Limited Power of Attorney are common place items in commerical transactions but their crossover into the residential world leaves unexperienced homeowners vulnerable. With LPOA, a critical element of consumer protection is removed by allowing predatory lenders and predatory foreclosure saving companies to take advantage of homeowners by sigining off on documents on their behalf. These documents can be changed at the last minute and by having a LPOA the homeowners gets stuck agreeing to items or terms which may not be beneficial to them. The homeowner is obliged to abide by the terms of whatever is signed on their behalf whether they like it or not.
Consumer groups estimate foreclosures will cost homeowners $164 billion as “foreclosure firms” swoop in and use LPOA to rip homeowners out of all of their equity value in their property. Thus allowing them to make a buck off the victimized homeowners.
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