In Puerto Rico, the mortgage debt that appears in the Property Registrynot is automatically eliminated when you pay off your loan. It is mandatory to go through the Mortgage Cancellation process and submit it to the Property Registry.
What is a Mortgage Note?
Among the documents you signed when you took over your mortgage is what is known as the mortgage note. A note is a written promise that money is owed. The note sets forth the terms and conditions for repayment of the obligation.
The note serves as a receipt, evidence and guarantee to the financial institution that a sum of money is owed. Thus, the creditor will have in his possession a document representing the amount of the loan. If you fail to pay, the creditor can recover the debt through a legal "foreclosure" process.
The financial institution will keep the original of the mortgage note until you finish paying off your mortgage. However, as usual, you may keep a copy of the note. On the other hand, if the financial institution sells your loan, it will endorse the note in favor of the new holder.
3 Ways to Cancel the Promissory Note
After you pay off your mortgage, the financial institution will send you the original note by certified mail. However, remember that the debt is not automatically cancelled in the Property Registry. Therefore, it is mandatory to cancel the promissory note in order to clear or release the lien.
There are 3 ways to cancel the note after you pay off your mortgage:
- The most common, by means of a deed of cancellation of the mortgage.
- By request to the Property Registry but only if the mortgage is more than 20 years overdue. That is, under this option, you would have to wait 2 decades from the date of maturity of the note.
- The last option would apply only if you lose the original note after it is returned. This would involve an expensive court proceeding called "cancellation of lost note". In this case, the court would be asked to declare the obligations represented by the note extinguished.
Don't risk it... it's mandatory!
It is highly recommended to perform the Mortgage Cancellation as soon as you can. In the meantime, be sure to keep the original promissory note in a safe place. In case you wish to sell your property, you will be asked to provide evidence of the cancellation of the debt at the Property Registry.
Do I have to be present?
Your presence for the signing of the deed no is required as long as the promissory note has a " Bearer " endorsement on the back of the promissory note. If such an endorsement does not appear, you can contact us to find out how to easily add it. We will then be able to cancel the promissory note once you send it to us by registered mail.
For your peace of mind, we take care of the whole process. The work includes the following: a) title study, b) deed, c) government fees, d) certified copy, and, e) presentation at the Property Registry. The total cost will depend on the principal or the amount of the mortgage, including the fees to be paid to the government. In general, the legal fees to be paid are based on the Notary Law. On the other hand, if your mortgage was made while you were married, only one of the spouses will need to sign for the cancellation. For a complete estimate, please fill out the form below.