No matter what answers you get here, they will not replace the invaluable advice of a real estate attorney.

If your main concern is just closing the transaction then Fedex is your friend. When ever I do transactions from over seas I email ALL docs (if they don't have email you can send them to a postal store like kinkos) and have them sent back via Fedex. It's expensive. $100+ but you can get anything in 48 hours. If the deed needs to be signed by the seller they will have to go to a US Consulate ( http://www.usembassy.gov/ ) to get a notary. It may take a little time to get an apt or you can expedite your appointment by paying a fee. This is a common problem because escrow almost alway requires a SPECIFIC power of attorney. If you want to go over the details feel free to call me.

It sounds like you did not apply for financing until after you entered a contract to purchase. Then if you locked an interest rate for 30 days the clock continues to move even if the loan application doesn’t. How quickly did you get everything to the LO? 2k to extend a rate lock sounds like a lot of money but then it is based on loan amount and length of the extension. On that subject, are you sure you need an extension? I just compared my rates today to a month ago, they are actually better today. You may be fighting a lock battle that doesn’t need to be fought.
The title issues are nothing unusual, that is what the title company is being paid to sort out. You could get your own attorney as suggested below, but that sounds redundant to me and would probably slow down the process, certainly make it more expensive.

Sleepless in Ca,

The previous answer offered by Larry is right on the money. I am doing a follow~up only to help drive the message home. Don't put off seeing a Real Estate Attorney and FAST , so he/she has an opportunity to review all documents and make sure that there won't be a resulting cloud on title after close of escrow . An escrow and title officer aren’t legal attorneys (at least in CA), and this deal is anything but normal. Since you have a seller 'overseas' and have to rely on the word of John Doe and the listing agent that they have the right to sell the home, you must have legal paperwork that has all of its 'i's doted and 't's crossed, plus make sure the POA has all of the correct verbiage and is enacted properly to protect YOUR interests. Last thing you want is having to defend yourself against an heir with this apparent faulty paperwork as your support for a legal transaction. With regards to a rate lock extension, it is also true, rates have gone up but also just come back down so it may be a mute point to try to 'pay' to get the same market rate as today. However, should the rate locked be even lower, well then it would be prudent and only right that the seller pick up the tab on the extension. Lastly, talk to your attorney and tax professional about FIRPTA and discuss your best coarse of action, since you are bluntly being told the seller is overseas.

Best of Luck !
Mario Gonzalez
Realtor
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"When you have exhausted all possibilities, remember this. You Haven't." (Thomas Edison)

Stop wasting time looking for answers online. Go see a real estate attorney today.

Based only on the information you've given, the Seller has clearly has fault though perhaps not intentional. The Seller appears to have wanted to properly sell the property however JDoe serving as proxy for the Seller failed to wait until he had the legal right to sign for the Seller before executing your contract.

The money you have in escrow may get tied up for a little while but if the facts are as you've presented them it's not at risk of being lost.

You have a couple of questions you need to answer. First and foremost do you still want the property? If so you need to work with the Seller to straighten out the paperwork mess. It sounds to me as if it would reasonable for the Seller to assume responsibility for all expenses connected to this process including paying if necessary to lock your rate, though frankly rates have either come down or are the same in the past 8 weeks or so.

Your agent may not be the best, but it doesn't sound to me that they are complicit, simply lazy. To be honest I'm not certain your agent would necessarily have been able to get a hold of the POA and even if they had their not qualified to pass judgment on it, this is something for an attorney. Certainly the agent's office and Broker in Charge should acknowledge that they fell flat in responding to your requests and in adequately protecting your interests and if everything you've written is true it would probably be appropriate for them to cover some of your out of pocket expenses if need be.

Now stop wasting time and go sit down with a real estate attorney to get some help either resolving the problem or pursuing the Seller for breach of contract.