These Loans Were Created to Help Homeowners, But For Some They Did the Opposite #homeownership #realestate #mortgage

Source:  LA Times

Consumer groups, regulators and lawmakers are increasingly raising concerns about Property Assessed Clean Energy loan programs, which are authorized by governments but largely administered and funded by private lenders.  In particular, the focus is on independent solar, plumbing and roofing contractors who pitch the loans and sign up consumers through online software - a system that's drawn scrutiny but helped the industry grow aggressively.

The total amount lent for residential PACE projects topped $1.5 billion in 2016, up from $350 million just two years earlier, according to trade group PACENation.  The loan programs are meant to serve a public good - allowing more people to finance solar and other energy-efficiency projects.

The loans are secured by a property lien and if unpaid a borrower can be foreclosed upon.  Consumers put no money down and usually don't pay anything for at least six months.  Eligibility is largely based on home equity.  Credit score and income are not a factor.

Critics say PACE can serve a worthy purpose, but worry too many consumers are agreeing to loans they don't need or understand after being contacted by aggressive contractors, who often make cold calls or engage in door-to-door marketing.

According to lawsuits and interviews with borrowers and their advocates, some contractors are inflating the cost of their services and misrepresenting how much the loans cost or how they are paid back.

Click on the link to check out the full story:
http://www.latimes.com/business/la-fi-pace-loans-20170604-story.html

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