Congress Takes on "Predatory" PACE Loans #realestate #homeownership #finance

Source:  Housing Wire

The rules surrounding energy retrofit loans, which have engendered a great deal of divisiveness over the last few years, could be about to change, as both houses of Congress are set to consider changes to the rule for loans created by the Property Assessed Clean Energy program.  The loans, also called PACE loans, allow homeowners to obtain financing to make improvements to their homes to increase the home's energy efficiency.  PACE loans are often used to add solar panels to a home.

The bill, titled the Protecting Americans from Credit Exploitation Act (or PACE Act), was introduced in the Senate by Sens. Tom Cotton, R-Ark.; Marco Rubio, R-Florida; and John Boozman, R-Ark.; and in the House of Representatives by Reps. Brad Sherman, D-Calif.; and Ed Royce, R-Calif.

Specifically, the bill would amend the Truth in Lending Act to require a full TILA disclosure of the loan details and terms, as is required now with mortgage loans.

C.A.R. President Geoff McIntosh said that the bill is especially important in California, where PACE loans are more prevalent than in other states.  "The use of Property Assessed Clean Energy liens, which lacks industry oversight, has grown more in California than in any other state," McIntosh said.

"Without federal regulatory oversight for these types of loans, unknowing homeowners are unable to compare costs, and terms and conditions, and are vulnerable to rates and fees that are in some cases predatory," McIntosh continued.  "We commend Reps. Sherman and Royce for introducing legislation that will allow the Consumer Financial Protection Bureau to regulate the companies selling PACE loans and protect consumers from hard sales tactics that often lead to abuse."

Check out the full story by clicking on the link:  http://www.housingwire.com/articles/39786-congress-takes-on-predatory-pace-loans

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