Consumer complaint received 2019-06-21
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: BANCO POPULAR DE PUERTO RICO (PR)

On XX/XX/XXXX I started a loan application process in Banco Popular de Puerto Rico. 

Since I apply for the mortgage loan, I notified to the bank that the seller is under bankruptcy law and that he could not continue paying the property ( which does not exempt him from the debt, but the bank was notified so that they can see the degree of urgency to sell and bought the property ). 

On XX/XX/XXXX ( 125 days after I apply for the mortgage loan ), they contact me to tell me that my loan was approved. But during all this process the bank never explained to us ( seller and buyer ) some important issues : 1. The loan was requested by FHA on XX/XX/XXXX, since the loan could not be completed by FHA, they offered another product name " conventional non-conforming '' which I accepted. For some reason and without my request, the bank closed my application, as if I had abandoned the application, which was not true. So the bank started a new application process on XX/XX/XXXX. 
2. During the month of XX/XX/XXXX the request of the loan suffered delays because some internal issues of the bank. As indicated by the bank ( Banco Popular de Puerto Rico ), this delays was because some kind of debt ( if I am not wrong and if they explained correctly ) during the property title study, a debt appeared since wen the actual seller bought the house in discussion ( in the year XXXX or something like that ), as if the payment of the loan had not been completed by the bank who owns the mortgage loan at that time to the new bank acquiring that loan. I understand that this is a situations between the lawyers at the time the mortgage loan closure was made : a. Banco Popular acquired the portfolio of mortgage loans where the seller acquired his loan for the property. 
b. At the moment Banco Popular acquires the loan portfolio, apparently the bank to not perform the necessary due diligence to verify that the loan portfolio acquired to make sure that it was in order.

c. This is a situation of a business of which I had nothing to do and is not related to my application, but still affected and delay my loan mortgage process.

3. Why during this process the bank never offered me alternatives or could not explain the following?

a. That the title study of the property expired and the bank let the document expired due to bank arrears. When the document expired that when I learned that the Banco Popular wanted charge me {$110.00} for the same title study. ( Question, because they did not tell me that this document expired and that to keep the same one in force every 30 days they could do it for a cost of {$25.00} and not for {$110.00} as they tried to charge me. ) This information was never given to me by the mortgage department. From the dates of XX/XX/XXXX, to XX/XX/XXXX, it took a long time to resolve the situation and during this process I was making follow-ups to the bank ( Banco Popular ) asking for its status and in many cases they did not give me an answer for what. 
b. On XX/XX/XXXX the bank approve the loan, but they tell me XXXX and only me ) that he is subject to make the improvements to the property mentioned in the appraisal of XX/XX/XXXX ( the appraisal was made with the intention of acquiring an FHA loan, so this type of loan have some federal requirements that the conventional non-conforming does not have ). By not understanding this policy or process of the bank, where a person who is not owner of the property, required to make improvements. I explained and claim my point to the bank and look for alternatives to close the loan as soon as possible because I had been waiting for a long time and I want to reach an agreement with the bank. So the bank tells me that I have to make the he property improvements to try to close on or before XX/XX/XXXX, since in XX/XX/XXXX the appraisal also expired and this include more money. I agree to make the repairs in a period of 3 days ( which I had to sacrifice time and money ) in order to be able to close on time since Banco Popular has been in the case since XX/XX/XXXX. ( Note : important and curious, why the seller was never notified about this process, according him, he told me, he was unaware of this process because the bank never contact him. He is the owner of the property, who really had to make the improvements? Did he have to know about the process?

4. I made the repairs to the property as the bank request ( in 3 days XX/XX/XXXX to XXXX XXXX ) and the appraiser inspects the property on XX/XX/XXXX and he give me the approval to close the loan. Next day the Banco Popular sent me the closing disclosures, there were some amounts of money which I did not understand, and which one of its employees indicated to me that this amount was a credit from the bank to the seller, I tell the employee if it is a credit that better add that amount to the other {$2500.00} that the seller was going to contribute for closing costs ( since in the original number there was a surplus of the loan and the seller was going to contribute for closing costs ) and the employee tells me that they can no longer change the numbers, he recommended to speak with the seller so that we can make the arrangements to paid the money. I was left with that doubt and I communicate with the origination employees that was the person who started the process, who knows all the problems I have had with the application and he explains that it is not a credit that is a contribution that the seller has to make for the months he has not paid the loan from XXXX, XXXX, XXXX, XXXX and XX/XX/XXXX, plus charges for arrears and additional legal expenses for carrying 5 months of arrears. ( At what time the bank never explain this to the seller or to me within the months of XXXX to XXXX? ) 5. From XXXX to XXXX I have been contacted about 8 different Banco Popular employees related to my loan application. ( Due to this, more delays occur, this initial communication is lost where the originators have the knowledge of what is happening and the situations of the seller and the buyer, this inefficient process that the Banco Popular kept turned my case into one more without giving it the priority that merited, because according to the closing department they received the loan in mid-XXXX. 
6. At what moment Banco Popular, explain to the seller and the buyer, that due to the payment arrears the loan will continue accumulating debt? Because of this last surprise the loan is in 'hold ' because the seller was never notified and I have to contact him to tell him this information. He told me that he could not make that payments contribution because he is under bankruptcy law and does not have the money to pay it. 

The situation is that from XX/XX/XXXX Banco Popular was aware that the seller could no longer pay the house mortgage, as I explained to the employee who originates the loan application. If they knew this, why we were not told, to the seller or me that the debt of the property was increasing. We are not the experts in mortgages and we do not know their processes ( we understand the responsibility and the contract that the seller has with his debt. 

I was focused on the purchase of that property as soon as possible. Because during all these delays there was no contact with the seller?, why they did not gave me instructions indicated something as simple as " the property is increasing in arrears by the seller, we recommend changing the mortgage product or advise or recommended to assume the current loan of the seller " before letting spending so much time in the this process. 

In addition they made me spend time and money making improvements in a property that belongs to Banco Popular. How it is possible that the Popular Bank ordered me ( the buyer ) to make repairs without owning the property and without consulting the seller? How as it is possible that we were not been oriented to the seller and / or to me about the debt increases. The bank have the ability and the systems, to guide and oriented the clients, they supposed to be the " experts '' in mortgages. If the seller or me had been good oriented from the beginning, I would not have made the improvements, if the bank explained that this process would take 5 months or 125 days I would have chosen to be responsible for the loan that the seller has with the bank, but No one informed us and / or advised that this would be a headache. We were not offered options, when you have the knowledge and the necessary tools to guide, explain, provide a good service, take the customer by the hand but unfortunately this was not the case.

By this means I demand that the problem caused by the Banco Popular be solved, I am willing to negotiate with the bank because I am interested in the property and I need where to live. If the bank does not want to negotiate a better terms for this mortgage loans, I demand that the money invested in the property improvements be refunding to me 100 %, since the property does not belong to me. Honestly this is already causing personal problems, it is consuming me a lot of time and so I noticed the employees and the Bank are not looking for satisfactory solutions for me that I am the client.

Note : I already filed two claims in the bank : First claim was on XX/XX/XXXX the bank contacted me on XX/XX/XXXX indicating that it was a courtesy call to give me an answer to my claim. Mostly, the call was focused to indicate that during the processes of this mortgage loan application, the Banco Popular was always in contact with the seller and that the Banco Popular owns the evidences of the communications with the seller. In addition they told me, they were waiting for a decision from me to know if I wanted the mortgage loan or not. 
On XX/XX/XXXX The seller and I send another claim to the bank in which the seller makes clear that he was never contacted by the bank during this process. And another claim filed by me requesting satisfactory negotiations or my money back.