Consumer complaint received 2022-06-20
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: BANCO POPULAR DE PUERTO RICO (PR)

On XX/XX/XXXX, we received a call from Banco Popular in the Loss Mitigation area to offer us several options. After an extensive interview and several questions, they gave us an evaluation and informed us that we were candidates to apply for a " short sale ''. But, what use is it to make a written statement of the hardship and documentation evidencing said hardship. Next I will make a summary of the events and efforts that we have carried out. 

We are going to be very honest with you ; Countless steps have been taken around the property, making a recount or summary of everything is something extremely onerous and draining at the same time ; but, within our compilation of documents and communications, we will try to do the most summarized, in the order in which the steps and events were carried out. 

As we all know, on XX/XX/XXXX, Hurricane Mara unfortunately passed through Puerto Rico, and with it our property was whipped by the winds ; but above all due to a strong runoff of water, not only from rain, but also from sanitary ( black ) water. I don't want to dwell too much on material losses ; I summarize it, in that everything that touched the sewage had to be discarded. Lots of losses. 

In terms of flooding, which was horrible, and this can be evidenced in the report presented by the soil expert, XXXX. XXXX XXXX ; the flooding and winds caused a landslide, which resulted in the land undermining the property below, creating a hole, and thus causing structural damage to the property. Such erosion gradually makes the structure UNSAFE, eventually becoming UNINHABITABLE. ( See annex A expert report ). 
We want to emphasize something ; when this property was purchased, that had never happened, so this area was NOT on the map as a flood zone. Now, after Hurricane Maria, every time it rains hard, the street continues to flood, which creates anxiety and uncertainty in us, that at any moment we will have to flood again. And, to make the situation worse, when it rains, the sewage spills out in front of the property, which causes an unbearable stench, and is also unhealthy for your health. 
The contracted expert, Engineer XXXX, made it abundantly clear in his report, and we quote : Although the actual costs will depend on the amount provided for each of the relevant engineering professionals and the contractor, it is the undersigned opinion that consideration should be given to an approximate budget of between {$60000.00} to {$75000.00}. The aforementioned, is the record of the dam in all this. 

Summary of post-Hurricane Maria events : After the passage of the Hurricane, my wife and I, with the greatest of wishes, took on the task of cleaning everything as best as possible, continuing to pay for the property, and starting to manage the claims to the respective insurers, ( XXXX, flood ) and ( XXXX, XXXX ), As is public and general knowledge, insurers took several months to answer the claims of their insured, in which in many cases, to date, ( almost two years after the event ), They have not yet resolved the claims. 

In the meantime, my wife in XX/XX/XXXX had some health complications, in which she had previously undergone on two different occasions in XXXX. There was no recovery and she continued to feel poor health, she had to make the decision to quit your job to be able to concentrate on your health and thus be able to find a proper diagnosis and treatment to follow. Even with my wife 's loss of income, we continued to pay the mortgage up to date, as we did not want to be affected in our credit, since we knew the importance of having excellent credit. 

On XX/XX/XXXX, the insured XXXX denied us flood coverage. On XX/XX/XXXX, XXXX was asked for reconsideration. Suspecting that XXXX was refusing to provide us with coverage, we proceeded on XX/XX/XXXX to file a complaint with the Insurance Commissioner. A few days after filing our complaint with the Insurance Commissioner, miraculously, we received a call from the XXXX offices, informing us that on XX/XX/XXXX they had sent us a letter granting us the reconsideration, and that the same It had been returned to the wrong address. In said letter they approved in part, but not before letting us know, that the policy did not cover the landslide damages claimed. 


On the other hand, we were still waiting for the insurer, XXXX, to answer us if it would cover the cost to fix the landslide and erosion of the property. It was not that at our insistence, that on XX/XX/XXXX they answered us denying us coverage ; that in turn we send you a letter dated XX/XX/XXXX. 

By the month of XX/XX/XXXX we had already been oriented by " Loss Mitigation '', and we decided to take advantage of the moratorium related to Hurricane Mara, hoping that at some point we would have some positive or encouraging response from one of the insured ; and even from the Insurance Commissioner 's Office itself, to be able to rebuild the property and not have to deliver our property. 

After several calls to the Insurance Commissioner 's office inquiring about the status of our claim and to top it off ; knowing that the expiration year of the term to sue the insured was about to expire ( that at that time the lawsuit before the Supreme Court on the expiration of the claims for Hurricane Maria had not yet been resolved ) ; On XX/XX/XXXX, we proceeded to file an Informative Motion before the Insurance Commissioner, which was quite detailed, with the hope that our claim would be resolved before the time to sue expired. Almost every day my wife made phone calls to XXXX XXXX XXXX XXXX to find out the status of the case, since we urgently needed it to be resolved before the year after Hurricane Mara passed. 

On XX/XX/XXXX, the legal representatives of XXXX requested an extension so that in a term of XXXX days they could submit the final position to the motion presented by us ; allegedly because they needed more time to evaluate the expert report signed by Engineer XXXX. all of the above, to continue lengthening the process. Even though since the month of XXXX of that same year said report had been sent to them for review and/or comments. 

Just days before the anniversary of the passage of Hurricane Maria through Puerto Rico, the Office of the Commissioner of Insurance had the courtesy to grant said extension, which expired on XX/XX/XXXX. It was not until XX/XX/XXXX, ( date on which they were outside the requested extension term and days after the year of Hurricane Mara ), which the legal representation of XXXX answers, and, therefore, denies our claim for damages caused by Hurricane Mara. On XX/XX/XXXX, the Office of the Commissioner of Insurance replied. 


Once the insured XXXX denied us coverage, we proceeded to call the offices of XXXX XXXX to see if they could take our case and/or guide us on the matter. Since the date of the first year of the passage of the Hurricane was so close, and they were extremely busy filing the demands so that they would not expire, they did not want to give us an appointment. They informed us that they did not want to take any risks, and preferred to wait to see if the Supreme Court 's decision was lowered, before filing any claim outside the statute of limitations. So we had no more to wait. 

Thus, we had no choice but to go back to the Loss Mitigation offices to explain our situation and see what other alternatives they could offer us. So they offered us a modification, in which the documentation was delivered to see if it was feasible for us. 

At our insistence, and even knowing that we were out of time to sue, we wanted to try again by calling XXXX XXXX, so that even if it was out of time, they would give us an orientation to see what the next step to follow would be, since all the steps that we had done had been unsuccessful. 

On XX/XX/XXXX they granted us the appointment. 
Below is a summary of what happened at the meeting with XXXX XXXX. 
That the Commissioner is not going to enter into whether or not it covers a contractual dispute, which is outside the scope of what the Commissioner can resolve. 
Rather, the Commissioner resolves if the insurers are not doing their job of adjusting the claim in a reasonable time, and they have to extend and do not resolve. There they do put pressure on them, because the Insurance Code says 90 days, or, they can be extended for just cause that one does not bring documents. In general, they have the practice, that they ask you for one thing today, a month goes by, they ask you for b, and they stretch the gum to extend the term. And, then later they say, ah, you took me to the Commissioner, but you owe me information. But it is that you did not give me that information on day 1. You asked me for it on day 60. Having been able to ask for it on day 1.

In other words, they have their tactics too. And if the Commissioner detects these practices, he does have the power to impose fines because they are not following the Code as it should.

But, as for entering into the controversy that exists here, which is a contractual question, whether the policy covers it or not, that is something that is up to the courts. That the Commissioner is not going to enter. And, they are going to say, Commissioner dismisses this, because they are talking about whether I denied or not denied, and this you are not the one who decides. This is a contract compliance dispute, which is disputed in court. 


He understands that the case would be solid to sue and argue even more, because the last determination, the one that they say denied coverage, was already approaching the year after Hurricane Maria had passed. 
In other words, it does indeed help, he starts arguing, How come I was a year old? If all this time we have been discussing the case. But, that they are going to fight it, they are going to fight it. The attorney let us know that the case was good enough to sue both insurers. Because it gave him the impression that XXXX also stomped because it would be up to them to pay for the part of the structural damage to the property. 
That this had been a contract. That we were paying for that within the mortgage. Because through the mortgage, they were forced to respond thanks to the payment that we made, in consideration of that payment. The bank does not pay it, we pay it with the money that is paid to the mortgage every month, and from there the bank takes it and pays them. And, with these payments, they are obliged to respond in the event of an event, and here the event happened. But until the supreme court resolves, nothing can be done. Because they run the risk of losing all the money invested in the lawsuit. 

On the other hand, he also informed us that it seemed to him that the complaint before the Insurance Commissioner was not going to bear fruit. The issue was that the claim be addressed, and it has already been done. Regarding the complaint regarding the cover, she understood that the Commissioner was not going to go into the merits, because that is a contractual issue, which the party is not satisfied with. It was to put pressure on them to resolve, and they already resolved that the cover was denied, so he recommended that we request the dismissal before the Insurance Commissioner and look for other alternatives with the bank. 
After that meeting with the lawyer we left even more discouraged. Therefore, on the instructions of the attorney, we proceeded to request the dismissal of the complaint before the Insurance Commissioner.

Thus, we decided to meet with the bank again to see what other alternative we could do. On two occasions an alternative of " Loss Mitigation '' was requested, but the bank only wants to lower a tiny amount to the monthly payment of the property, and we would have to pay again in 30 years. To which, after evaluating both alternatives, it is not feasible for us, since we would still have to invest the amount to rebuild the property, since if we do not do it in a few years the house would become uninhabitable for us. 


On XX/XX/XXXX, we were summoned by Banco Popular in relation to the foreclosure of the mortgage. Subsequent to that date, we went to a lawyer, who presented our case to him so that he could guide us on the procedure to follow. After having listened to all our ordeal, someone finally gave us a feasible alternative. That is when he advises us to go to the bank again, and explicitly request what is called a Deep in Lieu Foreclosure Non-retention. He informed us that the bank does not offer this alternative, that it has to be requested in order for it to be offered to us.

After having explained the pros and cons of this option, we came to the conclusion that this would be the feasible alternative for us. Since starting a new 30-year loan on a house that is destroyed, which according to what was stated in the expert report of engineer XXXX, that this house will soon be uninhabitable if the {$65000.00} is not invested in the reconstruction, we understood that this is reason of weight to request a " Deed in Lieu Foreclosure Non-Retention '', and, therefore, not wish to retain the property. In addition, the expenses are extremely high. 

Thus, we went back to the bank and asked for said option, which we filled out the entire document and delivered everything that was asked of us. The bank proceeded to send a bank appraiser for the property. As of XX/XX/XXXX, the as is valuation of our property was {$38000.00}. ( Appraisal is included. ) After said appraisal, with all the sufficient evidence about the management and conditions of the property, the bank denied us said option. 
As you have seen from the beginning, at all times we have been acting in good faith and always looking for alternatives, without leaving the bank alienated from the proceedings. It wasn't until we had no more options, that we literally threw in the towel, and decided not to want to retain ownership. 
In XX/XX/XXXX, Banco Popular filed a motion in compliance with the order and in request to stop the proceedings due to the pandemic, and the court granted it It was not until the end of XX/XX/XXXX that the court reopened the case and referred it to the XXXX XXXX. On XX/XX/XXXX, a conference hearing was given on the XXXX platform. XXXX XXXX XXXX, Mediator, XXXX XXXX, representative of the bank, and my wife, XXXX XXXX and the undersigned, attended said conference. In said mediation they offered us several alternatives, among them the " short sale '', which previously they had not wanted to offer us. Therefore, XXXX XXXX proceeded to schedule a call from the Loss Mitigation area for XX/XX/XXXX. 
We deliver all the documents that the bank demanded of us. The bank proceeded to make a new appraisal which valued the property at {$42000.00}. ( The appraisal is attached ). However, even with the appraisal so low, the bank sends us a letter offering us a mortgage modification. We do not understand, if they themselves were the ones who offered a " short sale '', and we delivered all the documents addressing it, they did not give us any explanation about the denial of the " short sale '', they only sent us this letter. ( Bank letter is included ). 

So they offer " options '', but in the long run we always get to the beginning, to the " mortgage modification '', which for obvious reasons, will not be accepted. Like a house appraised at {$42000.00}, they want us to pay {$120000.00} for 30 years, plus assume the expenses to fix it. 

On the other hand, we have made every effort to sell the property, so much so that we have a realtor working on it. When she saw said appraisal, she informed us that definitely in order to be able to sell said property, what would correspond would be a " short sale ''. No one in their right mind is going to buy a property at an overpriced price, and with so many repairs to be made to the house, which would increase expenses even more. According to the land expert, approximately {$70000.00} must be invested in the property to put it in optimal conditions and habitable. Since in the long run if the arrangements are not made, there is a risk of an imminent collapse. ( This is what the expert expresses in his report, which is attached to the appraisal ). 


You can imagine how we feel. We had faith that this time the bank would finally accept the option of a " short sale '', but the result was the same from the beginning. They still have all the insurance, they do not want to assume that loss ; but nevertheless, they want us to assume it. They will continue to act in bad faith. 

For all of the above, what we request is that you grant us a " short sale '' on our property, and, thus, free ourselves from this mortgage in its entirety, and to be able to move to a property that is safe and be able to return to start again. This process towards you was guided by the court mediator. Since she herself realized that the bank is acting in bad faith and does not want to help us in any way. 
Waiting for your prompt response to the matter, I remain. 
Cordially,