Special Power of Attorney: Why It Is Required?

Ignite Funding is licensed and regulated through the Nevada Division of Mortgage Lending as a commercial mortgage broker. As such, we must follow the Nevada Revised Statutes (NRS 645B) and Nevada Administrative Code (NAC 645B) as it relates to mortgage brokers. The Division mandates the use of certain forms and disclosures for any mortgage company that engages in private investor activity, one of which is the Special Power of Attorney. The Division requires the Special Power of Attorney to be signed by the investor with the verification of a notary public. The Division also requires this document to be executed by the investor for each loan an investor chooses to participate in.

What is the Purpose of the Special Power of Attorney?

The Special Power of Attorney (SPOA) allows Ignite Funding, as the broker and loan servicer, to perform the following services on behalf of investors:

1) Receive payments from the borrower that are due to investors for the loan obligation.

2) Disburse borrower payments to each investor on the loan.

3) Take legal action on behalf of investors as necessary to service the loan and protect the investor’s interest on the property.

Without the SPOA, Ignite Funding would not be able to service or offer multi-beneficiary loans to private investors. The SPOA allows Ignite Funding to work with the borrower and title companies, on behalf of every investor on the loan, to execute contracts, escrow instructions, conveyances, mortgages, deeds of trust and other documents necessary to complete the investment and service the loan. Without the SPOA, investors would individually be required to sign each of the above documents, essentially eliminating the passive nature of these investments and likely making it impossible for the transaction to ever be completed.

The scope of the SPOA is limited and is executed for the sole purpose of providing services for not more than one specific loan, as mandated by the Nevada Division of Mortgage Lending. Additionally, the SPOA does not give Ignite Funding any authorization to sign anything on behalf of the investor for any purpose other than listed above and stated on the SPOA itself. Neither Ignite Funding, as the mortgage broker, nor the investor may alter or waive any provision of the SPOA. The language of the SPOA is determined and set forth solely by the state.

In summary, the Special Power of Attorney was mandated by state regulators as a protection to investors. As a licensed mortgage broker, maintaining the compliance of company operations to protect its investors as prescribed by the state is one of Ignite Funding’s highest priorities. This is why it is important that Ignite Funding continues to implement and investors execute a Special Power of Attorney for every loan the investor elects to participate in.

If you have further questions about this topic, please reach out to your Investment Representative at Ignite Funding and they will be able to assist you.