Consumer complaint received 2025-09-16 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: BANCO POPULAR DE PUERTO RICO
State: NC

Complaint narrative:
XX/XX/XXXX VIA CERTIFIED MAIL / XXXX Popular , XXXX XXXX Banco Popular de Puerto Rico XXXX : XXXX XXXX XXXXXXXX XXXX XXXX  Legal Officer Popular XXXX XXXX XXXX XXXX XXXX. 
XXXX XXXX ( XXXX XXXX ), PR XXXX Re : FOURTH NOTICE OF TILA RESCISSION ENFORCEMENT AND FORMAL DEMAND Borrowers : XXXX XXXX XXXX & XXXX XXXX XXXX XXXX Loan No. : XXXX | Property : XXXX XXXX XXXX XXXX, XXXXXXXX XXXX  Your Letter Dated : XX/XX/XXXX Dear XXXX XXXX XXXX XXXX This letter responds to Banco Popular de Puerto Rico XXXX XX/XX/XXXX, correspondence and serves as my Fourth Formal Notice to enforce rescission and to demand immediate cancellation of the mortgage lien XXXX As explained below, the XX/XX/XXXX, transaction was, in law and fact, a refinancing that triggered the Truth in Lending Act ( TILA ) disclosure and rescission regime. I timely exercised rescission in XXXX. Under binding precedent, rescission was effective upon notice ; the note and mortgage became void by law operation, and Banco Popular 's 20 day duties to cancel the XXXX and return funds were triggered. 
I. MATERIAL FACTS ( ABRIDGED ) On XX/XX/XXXX, XXXX executed a so called " loan modification '' via Power of Attorney, consolidating the first and second mortgages and adding new money/fees into a new 40 year adjustable rate obligation of {$150000.00}. 
At least {$8200.00} in fees were capitalized into principal ( e.g., ~ {$5500.00} legal fees ; {$710.00} " closing '' fee ; {$1200.00} late charges ; {$690.00} misc. ), plus ~ {$42000.00} to pay off the XXXX second mortgage. The second lien was not cancelled of record until XX/XX/XXXX ( 21 months later ). 
XXXX 's Admission of Overcharging and Opaque Accounting : This fact is incontrovertibly established by XXXX 's own correspondence. In a letter to the undersigned, XXXX admitted it " identified that the amount capitalized in the modification included the amount of {$570.00} for legal expenses that should not have been included '' and that this generated {$360.00} in excess interest. However, XXXX 's provided math is opaque and inaccurate. The sum of the principal ( {$570.00} ) and interest ( {$360.00} ) is {$930.00}, yet XXXX issued a refund check for $ XXXX unexplained and un-itemized difference of {$290.00}. This admission proves the unlawful capitalization of unearned fees, and the discrepancy demonstrates a fundamental lack of transparency and accurate accounting, constituting further violations of TILA 's accuracy requirements and RESPA 's prohibition against fees for which no service was performed. 

XXXX did not provide a new TILA disclosure statement reflecting APR/finance charge/amount financed/payment schedule, nor did it deliver the Notice of Right to Cancel to each obligor, despite this being a refinancing under Reg Z 1026.20 ( a ). 
I served written TILA rescission notices on XX/XX/XXXX and XX/XX/XXXX ( within the extended three year period ). XXXX failed to comply within 20 days and never sought timely judicial relief. 
XXXX 's Failure to Comply with 20-Day Statutory Duties : Upon receipt of our rescission notices in XXXX, XXXX was statutorily obligated under 15 U.S.C. 1635 ( b ) to, within 20 days, terminate its security interest and return all money paid by the borrowers. XXXX did neither. This failure to comply is, in itself, a separate and distinct violation of TILA. See XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX ( XXXX XXXX XXXXXXXX ). XXXX 's unilateral inaction and subsequent attempts to treat the loan as valid constitute a bad faith effort to ignore the operation of law and fraudulently conceal the void nature of the transaction, all to its financial benefit. 
The public deed prepared by Notary XXXX XXXX XXXX XXXX omitted mandatory warning/admonition clauses, failed to secure timely cancellation of prior mortgages, and was re filed despite known defects, breaching XXXX XXXX Notarial Law and Mortgage Law. 
Notarial misconduct and POA issue : We provided our own prepared POA for use at closing ; the banks notary refused to accept it and conditioned the transaction on our signing a POA drafted by her. The notary thereby acted as XXXX drafter/advocate, not as an impartial public official, and failed to include the mandatory admonitions ( including federal rescission warnings ). The imposed POA did not expressly authorize the specific consolidation/novation executed ( 40year term, higher balance ). This coercion and insufficiency vitiate consent under the XXXX Civil Code and render the deed null under Notarial Law and Mortgage Law.

II. LEGAL GROUNDS AND APPLICABLE JURISPRUDENCE A. TILA RESCISSION -- EFFECTIVE UPON NOTICE ; XXXX 'S 20 DAY DUTIES 15 U.S.C. 1635 ; Reg Z 1026.23 : For a refinance of a principal dwelling mortgage, each obligor must receive two copies of the Notice of Right to Cancel and a new disclosure statement. Failure to deliver material disclosures or the cancel notice extends rescission up to three years. 
XXXX XXXX XXXX ( a ) : A transaction that satisfies and replaces prior obligations -- -including consolidations and new money -- -is a " refinancing, '' irrespective of label ( " modification '' ). See also XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX, XXXX ( XXXX XXXX XXXX ) ( rejecting a lender 's attempt to recharacterize a refinancing transaction as a " modification '' to evade TILA 's disclosure requirements ). 
XXXXXXXX XXXX XXXXXXXX, XXXX XXXX XXXX ( XXXX ) : Rescission is effected by written notice ; the borrower need not sue within three years. Upon notice, the note and mortgage are void ; the creditor has 20 days to cancel the lien and return funds. 
XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  ) : Congress gave consumers the right to rescind solely by notifying the creditor ; failure to comply subjects creditor to 1640 liability. See also XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX, XXXX XXXX XXXX XXXX XXXX  ) ( " Once a borrower exercises her right to rescind... the security interest becomes void and the creditor must return any money or property given by the borrower. " ). 
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) ( " The creditor 's failure to comply with its duties [ within 20 days ] ... is a separate TILA violation for which statutory damages are available. " ). Furthermore, a creditor 's unilateral denial of a rescission 's validity is a legal nullity. See XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ( " A creditor can not simply declare a borrower 's rescission invalid ; it must file a lawsuit. " ). 
B. RESPA AND FEDERAL UDAP RESPA, 12 U.S.C. 2607 : Prohibits unearned fees / fee splitting and requires transparency of settlement charges ( HUD 1 / itemization ). Capitalizing undisclosed/unenforceable fees ( e.g., legal/ '' closing '' /late charges ) into principal violates RESPA and TILA 's finance charge rules. See XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  ( explaining that fees must be for " services actually performed '' and not unearned markups ). 
FTC Act 5, 15 U.S.C. 45 : Misrepresentations and material omissions in a refinance ( e.g., portraying a proprietary consolidation as a HARP-style relief ; concealing true APR/finance charge ) constitute unfair/deceptive acts. TILA violations are per se UDAP. See FTC v. XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  ) ( affirming that a violation of another consumer protection statute like TILA is a per se unfair/deceptive act under Section 5 ). 
C. XXXX XXXX NOTARIAL & MORTGAGE LAW -- DEED NULLITY Notarial Law ( Ley XXXX XXXX ) & jurisprudence require the notary to act as an impartial public official, read/explain the deed, verify sufficiency of powers, and include mandatory warnings -- -especially in refinances ( right to cancel ; payoff of prior liens ). 
XXXX XXXX, XXXXXXXX XXXX XXXX XXXX  The notary must advise borrowers of essential consequences and include warning clauses ; omission vitiates informed consent and breaches notarial duties. See also XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX ( reaffirming the notary 's duty of " abnegated probity '' and the grave consequences of failing to secure informed consent, particularly for vulnerable parties ). 
In re XXXX XXXX, XXXX XXXX XXXX XXXX XXXXXXXX ) : Notary discipline for failing to verify/document essential elements; underscoring absolute probity duties. 
XXXX vXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Banco Popular de XXXX. v. XXXX, XXXXXXXX XXXX XXXX XXXX XXXXXXXX ) : Notarial omissions/defects can invalidate deeds/registrations line of authority is strong. To further bolster it, cite : XXXX XXXX v. XXXX XXXX, XXXXXXXX XXXX XXXX  ( holding that a notary 's failure to comply with mandatory legal formalities renders the instrument null and void ab initio ). 
Mortgage Law ( Arts. 86-90 ) : Upon novation/refinance, prior mortgages must be promptly cancelled of record ; failure to cancel the second lien until XXXX contravened law and prejudiced the borrower See Art. 90 of the Mortgage Law and XXXX v. Banco Popular, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) ( discussing the lender 's statutory duty to cancel a satisfied mortgage promptly to avoid prejudicing the borrower ). 
XXXX XXXX XXXX XXXX XXXX -- VICES OF CONSENT ; INSUFFICIENT POA AUTHORITY Civil Code ( 1930 ) Arts. 1217-1218 : Consent is invalid if given in error, through deceit ( dolo ), or without knowledge of essential terms/consequences ; the XXXX deed was executed without informed consent due to omissions by XXXX and the notary XXXX 
Mandate ( XXXX ) -- XXXX. XXXX : A special mandate is required for acts of strict dominion ( e.g., encumbering real property, consolidating obligations, novation increasing debt ). The POA cited did not expressly authorize consolidating two mortgage debts into a new 40 year, higher balance obligation XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( " A power of attorney must be strictly construed, and the agent may only perform those acts which are expressly conferred. " ). Acts of strict dominion, like mortgaging property, require explicit, unambiguous authorization. 
Accordingly, beyond federal TILA rescission, the XXXX public deed is also null under XXXX XXXX law for ( i ) lack of informed consent ; ( ii ) notarial violations ; and ( iii ) insufficiency of powers granted in the POA for the specific consolidation/novation executed. 
III. DECLARATION OF NULLITY AND CURRENT STATUS By operation of federal law ( 15 U.S.C. 1635 ; XXXX XXXX, the XX/XX/XXXX, note and mortgage are void as of XXXX 's receipt of my XXXX rescission notices. Independently, under XXXX XXXX law, the public deed notarized by XXXX XXXX XXXX XXXX is null due to notarial defects, lack of informed consent, and inadequate authority under the POA. XXXX therefore has no lawful security interest and no right to collect under the rescinded instrument. 
IV. FORMAL DEMAND -- 20 CALENDAR DAYS FROM RECEIPT Written acknowledgment that the XXXX loan was rescinded and is void ; cease and desist all collection. 
Execute and record a full cancellation of the XXXX mortgage at the XXXX XXXX XXXX XXXX ( provide executed release for my review within 20 days ). 
Provide a complete accounting and promptly return all payments made on the rescinded loan, including any escrow surpluses ; remove all unlawful fees/charges. 
Instruct all credit bureaus to delete/neutralize tradelines related to the rescinded loan and to the second mortgage reported as " paid by refinance, '' and confirm in writing within 20 days. 
Produce copies of all closing disclosures, internal payoff ledgers for the second mortgage, fee invoices ( e.g., legal fees ), and communications with the notary/notarial office regarding the deed 's registry qualifications/refiling. 
Identify by name and title the XXXX personnel who approved fee capitalization and consolidation of the second mortgage into the XXXX instrument. 
V. NOTICE TO REGULATORS ; MEDIA AND CLASS COUNSEL EVALUATION Copies of this letter and supporting materials are being provided to : ( XXXX ) XXXX XXXX XXXX de XXXX XXXX ( XXXX ), ( 2 ) the Federal Reserve Bank for consumer compliance oversight, and ( 3 ) the Consumer Financial Protection Bureau ( CFPB ). Given the systemic nature of these practices, I am also evaluating referral to the press and to class action counsel.

VI. RESERVATION OF RIGHTS All rights and remedies are reserved. Failure to comply within 20 days will result in immediate pursuit of judicial relief, including declaratory and injunctive relief, statutory damages under 15 U.S.C. 1640, costs and attorneys ' fees, and appropriate relief under XXXX XXXX law ( nullity, restitution, damages, and notarial disciplinary referrals ). 

Sincerely, __________________________________________ XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation