Situation: At closing of real estate secured loan, representative of applicant presented a durable POA (Arizona POA) to closing attorney. Applicant is a quadriplegic who can’t speak or communicate in any manner. The closing attorney refused to close the loan because he did not believe the customer was competent to sign and was unsure of whether the applicant was even aware of the situation.

How would other banks handle this situation? My guess is that this goes down to the old issue of whether such a document is acceptable is up to NC state law. Does the fact that the POA is witnessed and notarized sway the decision? Does NC state law specifically provide for such a form of authentication (out of state POA)? Frankly, we can’t force the attorney to close the loan but I have FHA protected class concerns.

Any thoughts would be greatly appreciated.

Typically, unless the POA meets the specific requirements of the State in which it is used, it would not be valid in another State. NC has some specific requirements for content in Chapter 32A: Powers of Attorney. But there also are provisions on refusal and potential penalties. I think you need to engage a different legal counsel for a second opinion.

The POA was "executed" while the applicant was in good health; i.e. before he got into his present condition, right?