General Predatory Lending Briefs, Reports & Press Releases

Property Assessed Clean Energy (PACE) Loans || Land Installment Contracts

Property Assessed Clean Energy (PACE) Loans

• Group letter from consumer advocates and industry groups urging the CFPB to initiate PACE rulemaking, Oct. 15, 2018
• Comments in response to the Consumer Financial Protection Bureau (“CFPB”)’s Request for Information (“RFI”) regarding its inherited regulations and rulemaking authorities with focuse on incorporating Property Assessed Clean Energy (PACE) loans into the Truth in Lending Act’s (TILA) Regulation Z mortgage protections, June 25, 2018
• Comments submitted by the National Consumer Law Center and the National Housing Law Project ​to the California Dept. of Business Oversight ​in response to proposed rules​ implement​ing the consumer protection provisions​ of AB 1284 for Property Assessed Clean Energy (PACE) loans, June 8, 2018
• Letter re: California Senate Bill 1087 from National Housing Law Project, Housing and Economic Rights Advocates, and National Consumer Law Center recommending further changes to PACE legislation, April 11, 2018
• Comments submitted by the National Consumer Law Center and the National Housing Law Project to the California Dept. of Business Oversight on the proposed rulemaking implementation of AB 1284 for Property Assessed Clean Energy (PACE) loans, Jan. 5, 2018
• Press Release: Housing and Consumer Groups Statement on California A.B. 1284’s PACE Loan Ability-to-Repay Provisions, Sept. 15, 2017
• Issue brief: Residential Property Assessed Clean Energy (PACE) Loans: The Perils of Easy Money for Clean Energy Improvements, Sept. 2017
  There has been a sharp increase in homeowner problems with PACE loans. The laudable goal of improving home energy efficiency is being overshadowed by the lack of adequate consumer protections for these loans. This brief catalogs consumer stories and summarizes some of the abuses and challenges of PACE financing.
• The Department of Energy: Best Practice Guidelines for Residential PACE Financing: Consumer Protections, Dec. 15, 2016 (PowerPoint)
• Press Release: PACE Mortgages Still Risky Despite New Dept. of Energy Guidelines, Nov. 18, 2016
• Policy brief: PACE Energy Efficiency Loans: Good Intentions, Big Risks for Consumers, Sept. 2016
• Homeowner Stories: San Diego, CA (Elder Law & Advocacy)

PACE Loans in the News

• April 18, 2017, North Bay Business Journal “PACE green home-upgrade loans could get bigger legal leash”
• April 11, 2017, Florida Sun Sentinel “Federal suit says PACE home improvement loan program fails to disclose risks, costs”
• April 5, 2017, Wall Street Journal, Green-Energy PACE Home Loans Catch Congress’s Ire
• Jan. 10, 2017 America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis (WSJ)
• April 30, 2016 CBS Los Angeles “ Goldstein Investigation: How Going Green Might Have You Seeing Red In The End” || Summary and quotes
• Oct 10, 2016 MarketWatch “These government-approved high-interest green loans are turning mortgage lending upside down” || Summary 
• June 2, 2016 San Gabriel Valley Tribune “Watch out for these green-energy improvement loans that put homeowners at financial risk” || Summary
• November 14, 2016 The San Diego Reader “Solar-power financing could spell trouble: “I hate to see people lose their homes over something I was involved with”  || Summary
• February 23, 2016 Comstock’s Business Insight for the Capital Region “A Growing Green Debt? As PACE takes off, realtors warn that unwary homeowners are complicating their finances” || Summary
• September 27, 2016 The Sacramento Bee “Is rooftop solar worth it? Californians consider the questions as use, complaints rise” || Sumary and quotes
• May 3, 2016 The Sacramento Bee “Solar panel loans have spun out of control” || Summary
• BiggerPockets.com “Southern California Hero Program – Renovate America – Scam” || Summary
• July 19, 2016 California Association of Realtors “C.A.R. Statement on HUD Insuring FHA Mortgages with PACE Loans” || Summary
• March 28, 2015 Pedersen Real Estate “Some Big Problems with HERO PACE program – Homeowners Beware!” || Summary
• June 12, 2015 The Press Enterprise “MORENO VALLEY: Homebuyer files lawsuit over HERO-financed transaction” || Summary
• Oct. 5, 2015 The National Real Estate Post “Run From PACE Loans… Run” || Summary
• July 17, 2015 The Sacramento Bee “Energy Improvement program can hobble home sales” || Summary
• April 9, 2016 Ventura County Star “Opinion: Mark Chacon: Energy-efficiency loans could cause homeowner headaches” || Summary

Land Installment Contracts

• Statement of the National Consumer Law Center for Hearing: A Review of the State of and Barriers to Minority Homeownership before the U.S. House Financial Services Committee Subcommittee on Housing, Community Development and Insurance, May 8, 2019
• Policy Brief: Policy Recommendations for a Strong State Law on Land Contracts, April 2017
• Toxic Transactions: How Land Installment Contracts Once Again Threaten Communities of Color, July 2016
• In the News (Installment Contracts)
  11/2/17 WSB-TV2, Atlanta (4:05 runtime) “Company accused of preying on low-income minorities trying to buy homes” in which NCLC / Atlanta Legal Aid attorney Sarah Bolling Mancini discusses a lawsuit brought by the two legal organizations against Harbour Portfolio for selling toxic land-installment contracts to unsuspecting families in Atlanta.
  11/2/17 WSB-TV2, Atlanta digs into a national overview of the problem in a separate story (3:45 runtime)

Litigation

• Horne et al. v. Harbour Portfolio et al.
  Horne et al. v. Harbour Portfolio et al. Second Amended Complaint (N.D. GA)
  Horne et al. v. Harbour Portfolio et al. Third Amended Complaint (N.D. GA)
  Opposition to Defendant Harbour’s Motion to Dismiss Second Amended Complaint
  Opposition to Defendant NAA’s Motion to Dismiss Second Amended Complaint
  Order on Motion to Dismiss Second Amended Complaint (N.D. GA)Horne v. Harbour Portfolio, Unites States District Court for the Northern District of Georgia: Suit was brought by the Atlanta Legal Aid Society on behalf of 22 African-American residents representing 16 household. The action asserted claims of discriminatory targeting for abusive credit terms in home purchase “contract for deed” transactions extended by Harbour Portfolio. The complaint alleged that Harbour Portfolio, through both intentional targeting of African-American consumers and practices that have a foreseeable disparate impact on African-American consumers, violated the Fair Housing Act of 1968, as amended, 42 U.S.C. § 3601, et seq., the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq., and the Georgia Fair Housing Act, O.C.G.A. § 8-3-200 et seq. NCLC subsequently joined the case as plaintiffs’ co-counsel.On March 20, 3018, the Court denied a motion to dismiss for all but one of the claims asserted (wrongful eviction). Thereafter, during on-going discovery, including subpoenas issued to Fannie Mae, requests for production of documents by the defendants and depositions of the defendant principal, the parties engaged in mediation before a U.S. Magistrate Judge.

  The case settled in December, 2018. The 12 households who were still living in their homes received a deed converting their contract for deed to a mortgage with title insurance, reduced interest rates, shorter repayment terms and, in some cases, principal reductions. They also received a lump sum cash payment. The four households who were evicted/no longer living in the home received separate lump sum cash payments. As part of the settlement, separate attorneys’ fees were paid to plaintiffs’ counsel of record.

Other Resources

• Federal Regulation of Consumer Credit: The Cause or the Cure for Predatory Lending, March 2004