Attorney General Jerry Brown fights for PACE energy efficiency program
(excerpted from LA Times article)
A week after federal regulators blocked financing programs for home energy efficiency retrofits around the country, California officials are using different tactics to try to change their minds.
Some, like state utility officials, have sent pleading letters. But California Atty. Gen. Jerry Brown said Wednesday that he is taking the government straight to court.
Brown is initiating “major action” against the Federal Housing Finance Agency to restart the stalled Property Assessed Clean Energy programs, known as PACE. The programs encouraged homeowners to use bond-backed property tax assessments to install solar panels and make insulation improvements. The funds are paid back over a decade or more through a senior lien attached to the property, which takes precedence over an existing mortgage in the case of a foreclosure.
But on July 6, the Federal Housing Finance Agency issued a statement saying that PACE loans presented “unusual and difficult risk management challenges” for lenders, servicers and mortgage securities investors in a “fragile housing finance market.”
The decision, which effectively suspended all PACE programs nationwide, agreed with concerns voiced by federally controlled mortgage giants Fannie Mae and Freddie Mac in May. The federal agency directed the lenders to avoid the programs.
Calling the move a “regulatory strangulation of the state’s grass-roots program,” Brown is suing the agency and the lenders to allow PACE programs to proceed. In the complaint, filed in U.S. District Court in Oakland, Brown says that the programs were mischaracterized as “loans” instead of “assessments” and improperly portrayed as violating Fannie Mae and Freddie Mac’s standard lending procedures.
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