Improving your house\u2019s energy efficiency is prudent and praiseworthy. Not only will it reduce the costs of heating and cooling, but it also will benefit the environment. To encourage homeowners to undertake these types of improvements \u2014 solar panels, double pane windows, water efficient toilets and others \u2014 special loan programs have been created.<\/p>\n
Property Assessed Clean Energy \u2014 or PACE loans \u2014 are available to help homeowners purchase these energy efficiencies.<\/p>\n
Unfortunately, unscrupulous contracts and lenders are converting some PACE programs into the same problems that low- and no-interest home loans created in the mid-2000s.<\/p>\n
\u201c\u2026 [T]he laudable goal of improving home energy efficiency is being overshadowed by the lack of adequate consumer protection for these loans,\u201d wrote the National Consumer Law Center. According to the center, the elderly living on fixed incomes are the targets.<\/p>\n
Contractors can solicit homeowners to purchase this equipment. They promise large electric savings, and often conceal the interest rates and consequences of loan delinquencies. Often homeowners are not evaluated for qualifications for state and federal grants that would be free or have very low-interest repayments.<\/p>\n
These are high-interest loans, which are guaranteed by the property. More importantly, they are placed on the tax rolls and are given higher priority than other loans. Many people who thought the electrical bill savings would pay the loan, fell behind on payments and have lost their homes.<\/p>\n
Since so many people have fallen prey to this problem, state governments are taking action. Last week, Gov. Jerry Brown signed legislation, Assembly Bill 1284, to eliminate one of the hidden tools used to obtain the loan.<\/p>\n
Previously, lenders did not have to obtain a financial statement assessing the applicant\u2019s ability to repay the loan. Once the loan request papers were signed, the lender could ask local governments to place a lien on the property and to collect the payments without any verifiable data on the borrower\u2019s capability to repay the loan.<\/p>\n
Being paid to make the collections was an incentive for local governments. But many of the borrowers would not have qualified for the loans if an assessment had been made prior to its approval. This will now be required in California.<\/p>\n
While many organizations, such as the National Consumer Law Center, support the legislation and are glad the governor signed it, some are concerned with a section of the bill that permits the lenders to hide their behavior.<\/p>\n
The new law permits the state\u2019s Business Development Administration to investigation lender behavior and to take actions. However, if the subject of the investigations agrees with the BDA recommendations, the whole investigation results will be confidential.<\/p>\n
The California News Publishers Association wrote the bill\u2019s sponsor, Assemblyman Matt Dababneh, objecting to this provision that appeared at the last minute.<\/p>\n
\u201cThe mandatory confidentiality proposed by this bill undermines any specter of real reform \u2026 and prevents the press and the public from engaging in any oversight of the PACE program to detect and deter potential malfeasance,\u201d wrote Nikki Moore, CNPA legal counsel.<\/p>\n
CNPA argued that it inhibited media\u2019s ability to investigate or even identify possible collusion between the faulty lenders and the commissioners reviewing the charges.<\/p>\n
In his press release following the governor\u2019s signature of the bill, Dababneh said, \u201cThis bill introduces the first state regulatory structure and ability-to-pay requirements in the country and provides an enforcement mechanism to guarantee increased consumer protections.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Improving your house\u2019s energy efficiency is prudent and praiseworthy. Not only will it reduce the costs of heating and cooling, but it also will benefit the environment. To encourage homeowners to undertake these types of improvements \u2014 solar panels, double pane windows, water efficient toilets and others \u2014 special loan programs have been created. Property […]<\/p>\n","protected":false},"author":58,"featured_media":52109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"amp_status":"","footnotes":""},"categories":[5],"tags":[],"yoast_head":"\n