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News & Press: Industry News

PACE Financing Facing Restrictions

Tuesday, March 19, 2019  
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The Consumer Financial Protection Bureau announced that it is seeking public comments on proposed rules that would treat Property Assessed Clean Energy (PACE) financing much like mortgage loans. The CLTA has been very active promoting California laws to regulate PACE financing, but the federal rules would apply nationwide. The American Land Title Association plans to submit comments according to ALTA President Cynthia Durham Blair. PACE companies have come under criticism in the past for potentially unscrupulous practices, including financing projects that homeowners could not afford, or benefiting from sales tactics that downplay or hide the fact home sellers must repay the entire financing when they sell their home, or that the financing has the priority of a tax lien.

The CFPB Advance Notice of Proposed Rulemaking could result in an Ability-to-Repay provision similar to the requirement for mortgage lenders who must first determine a borrower can repay a loan before making the loan. The CFPB is asking for responses on more than 30 questions related to PACE financing in its request for public comments. Subsequent to gathering feedback the CFPB will then move forward with a Notice of Proposed Rulemaking.

California Land Title Association

1215 K Street #1816 Sacramento, CA 95814-3905
Email:  |  Phone: 916-444-2647  |   Fax: 916-444-2851