How should loan be prepared if attorney in fact will sign all documents. Is the loan in the borrower's name only with attorney in fact's name on signature lines?

We prepare in the name styled as follows:
Joe Black
By _____________________ POA
and Notary acknowledgement would be in a Representative Capacity

Yes, the loan would be prepared in the actual borrower's name. Another option for the signature is:

_______________________________
John Doe, Attorney-in-fact for Joe Black

Of course a copy of the power of attorney document should be retained in the loan file for verification of the signer's authority.

You also might want to obtain an "Affidavit of No Recission for Power of Attorney", a form that we use. In this affidavit the Attorney in Fact attests to the facts that they have not received any notice of any revocation or modification, that the Grantor is not deceased and that they continue to hold all of the POA powers. (Unless it's a brand new POA and you can verify all of this information.)