Loan Officer Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

The choice that states the title agency often acts as the power of attorney (POA) signer is not a requirement when using a POA for signatures on a security instrument. A power of attorney is typically executed by an individual who grants another person the authority to act on their behalf. While it is common for a title agency to facilitate transactions or handle documentation, they are not designated as an automatic agent under a POA unless specifically granted that authority by the principal.

In contrast, having the POA notarized is usually a requirement to ensure the document's validity and prevent fraud. Keeping a copy of the POA in the borrower's file is important for the lender for record-keeping and legal purposes. Additionally, the concept that only purchase transactions are eligible for a POA is incorrect, as POAs may be used in various transactions, including refinances and other types of mortgage transactions. Therefore, the true nature of a POA does not limit it strictly to purchase transactions.