Hello my name is Santiago Lampón. I am a lawyer and a notary in Puerto Rico and welcome to Puerto Rico Legal Blog. If you like this video or any of the other videos or articles that I post on this blog you may subscribe for free on this page. Today I am going to cover mortgages and specifically the cancellation of mortgages in Puerto Rico.
This is one issue that I have been faced with currently in my practice as more real estate transactions pick up here in Puerto Rico, more mortgages are involved and there are two things particularly that I found are problematic as the client moves along and pays the note every month or every six months, whatever the terms are. One is for the lender who is usually the seller and number two, for the buyer who is usually the borrower.
First the seller; if you do a property sale that involves a mortgage and you are the note holder you have to make sure that you safeguard that note for the length of the mortgage. As long as it takes the borrower to pay you have to hold the note for two main reasons. Number one, you are the borrower, you need the note to execute the mortgage. You cannot do the execution of the mortgage without the note. Number two; once that borrower pays the note you have to deliver the note back to the borrower, you have to. If you don’t you have to follow the a special process in Puerto Rico that will require you to hire a lawyer, go to court, do a hearing and do a whole bunch of steps that is going to make it more expensive to you as a lender, but it also makes it difficult for the borrower to actually do a follow up transaction or a second transaction or sell the property in the future. As a borrower you have to make sure that your lender has this instructions, so it is important that at closing, the notary doing the transaction, doing the mortgage, gives a notice to the seller and the lender about this particularity and that you as borrower understand that once you have paid your mortgage you have to get the note from the lender. You have to get the note back to you. And here is a very important thing, you have to take this note to a notary in Puerto Rico and have the notary cancel the note and that cancellation, which is done through a deed, has to be filed at the property registry.
So it is very important that both lender and borrower are in understanding and work in agreement with what has to happen with that note during the course of the mortgage and once the mortgage is paid.
If you have any questions about this just post a note here on the blog or send me an email. Again I am lawyer Santiago Lampón. I am a lawyer and a notary here in Puerto Rico and you have watched a video here in Puerto Rico Legal Video Blog. If you like this video and you want to be advised or notified of further videos or further postings that I do just subscribe for free on this page. Thank you.