Consumer complaint received 2026-05-11 00:00:00
Product: Debt collection — I do not know
Issue: False statements or representation — Attempted to collect wrong amount
Company: Sunlight Financial LLC
State: TX

Complaint narrative:
NOTICE OF RESCISSION DUE TO MISREPRESENTATION AND FRAUD Based on the documents provided, here is an argument for Misrepresentation by Sunlight Financial. The core of this argument rests on the internal contradictions between Sunlights legal assertions and the actual language of their contracts regarding the nature of the collateral and the security interest. Argument : Fraudulent Misrepresentation of Security Interest and Loan Characterization 1. Contradictory Definitions of Collateral In Exhibit A, Sunlight Financial explicitly denies that they hold a security interest in the consumers principal dwelling. They state that the loan is " defined and treated as personal property '' and that no " encumbrance has been placed on the residence. '' However, Exhibit C-1 directly contradicts this. The contract language states that Sunlight may make a " fixture filing '' and, crucially, that they may " enforce rights in the Equipment ... under state real estate or mortgage law. '' * The Misrepresentation : Sunlight can not claim the loan is " strictly limited '' to personal property ( to avoid Truth in Lending Act rescission rights ) while simultaneously reserving the right to use " mortgage law '' to enforce their interest. By claiming the interest is not real-estate related, they may be attempting to circumvent consumer protection laws ( like 12 C.F.R. 1026.23 ) that apply when a dwelling is used as collateral. 2. Misleading Characterization of the " Project '' In Exhibit C, the contract describes the transaction as a " home improvement project. '' * Standard industry and legal definitions typically treat " home improvements '' as enhancements to the real property. By labeling it a " home improvement project '' in the disclosure but later insisting in Exhibit A that it is strictly " personal property '' ( like a refrigerator or a car ), Sunlight and XXXX XXXX XXXX are using shifting definitions to suit their legal needs while keeping the consumer in the dark about the true nature of the lien on their home. 3. Admission via " Corrective '' Action In Exhibit D, Sunlight states they have initiated the termination of the fixture filing ( UCC-3 ) " without taking any position on the legal analysis. '' The Argument : While they frame this as a resolution, it serves as evidence of an Improper Filing. If the filing were legitimate and correctly represented in the original loan agreement, there would be no reason to terminate it in response to a formal complaint. The fact that they are removing the fixture filing suggests that the original filing was either unauthorized by the loans stated terms or was an attempt to cloud the property title without granting the consumer the legal protections ( like the right of rescission ) that come with real estate-collateralized loans. 4. Failure of Due Diligence A lender or agent is responsible for the accuracy of the disclosures provided to the borrower. The bank allowed a " Fixture Filing '' to be executed ( which attaches to the real estate records ) while providing disclosures stating that no such interest in the residence existed. This discrepancy between the recorded public filing and the private loan disclosures constitutes a material misrepresentation that affects the borrower 's ability to refinance or sell their home. Concealment of Rescission Rights Under Federal Law The contradictory disclosures and shifting legal characterizations appear designed to circumvent protections afforded under the federal Truth in Lending Act ( TILA ), including the borrowers right of rescission under 15 U.S.C. 1635 and Regulation Z, 12 C.F.R. 1026.23. Where a creditor acquires, claims, or reserves rights associated with a security interest in a consumers principal dwelling, clear and accurate disclosures are required. The failure to accurately disclose : the existence of the claimed interest, the legal effect of the fixture filing, the use of mortgage-law enforcement rights, and the true nature of the collateral constitutes a material disclosure violation. The transaction documents : characterized the project as a home improvement project, authorized fixture filings connected to the real property, reserved enforcement rights under mortgage law, yet simultaneously attempted to characterize the transaction as unrelated to the residence. This shifting characterization materially impaired the borrowers ability to : understand the true nature of the loan, understand the legal effect of the claimed lien, evaluate rescission rights, assess the impact on title to the residence, understand the implications for refinancing or sale of the property, Summary : Sunlight Financial engaged in Misrepresentation by Omission and Contradiction. They secured the loan using the home as collateral ( via a fixture filing and " mortgage law '' enforcement rights ) but denied doing so in writing to prevent the borrower from exercising their federal Right of Rescission.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation