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By Kerry Smith<\/div><\/div>\n

The agency says \u201cunscrupulous companies bait homeowners.\u201d It\u2019s taking comments on new proposed rules that make sure homeowners have the ability to repay.<\/span><\/span><\/p>\n<\/div>\n

WASHINGTON \u2013 The Consumer Financial Protection Bureau (CFPB) proposed a rule \u2013 based on a congressional mandate \u2013 to establish consumer protections for residential Property Assessed Clean Energy (PACE) loans.<\/span><\/span><\/p>\n

PACE loans attach to a home rather than a person. They\u2019re secured by a property tax lien on the borrower\u2019s home and often promoted as a way to finance clean energy improvements, such as solar panels. However, CFPB wants to make it easier for homeowners to understand how a PACE loan works.<\/span><\/span><\/p>\n

\u201cWhen unscrupulous companies bait homeowners into unaffordable loans with exaggerated promises of energy bill savings, this can lead to serious financial distress,\u201d says CFPB Director Rohit Chopra. \u201cWe are proposing new rules that would require sensible safeguards on these clean energy loans.\u201d<\/span><\/span><\/p>\n

Under the proposed rule, lenders must assess a borrower\u2019s ability to repay a PACE loan. The change would also provide a framework for how PACE loans are treated under the Truth in Lending Act.<\/span><\/span><\/p>\n

According to a report published by CFPB \u2013 Property Assessed Clean Energy (PACE) Financing and Consumer Financial Outcomes<\/a> \u2013\u00a0PACE loans cause an increase in the number of borrowers who fall behind on mortgage payments, in addition to other negative credit outcomes.<\/span><\/span><\/p>\n

How PACE loans work<\/span><\/span><\/h3>\n
Residential PACE loans finance home improvements, and borrowers pay back the loans over time through increased property tax payments. Eligible upgrades can include energy and water efficiency projects, or projects to prepare homes for natural disasters. From 2014-2020, a majority of PACE loans were for home improvements for natural disaster preparedness.<\/span><\/span><\/p>\n
Since the obligation to pay back the loan via higher property tax payments remains with the property, it gets transferred to a new homeowner if the borrower sells the property, providing the home sellers doesn\u2019t pay off any remaining amount. In the past, that has created some problems during the home sale process.<\/span><\/span><\/p>\n
Although PACE lending is authorized by local governments, private companies typically administer the programs, which can include marketing of the loans, managing originations, and making lending decisions.<\/span><\/span><\/p>\n
CFPB\u2019s newly proposed rule comes five years after President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018, which directed CFPB to create ability-to-repay rules for PACE financing and to apply the civil liability provisions of the Truth in Lending Act for violations.<\/span><\/span><\/p>\n
On Thursday, the proposed rule was published in the Federal Register<\/a>, which includes details on proposed rule changes and information on how to submit comments for consideration. Public comments are due by July 26, 2023, or 30 days after publication in the Federal Register, whichever is later.<\/span><\/span><\/p>\n
\u00a9 2023 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n
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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"
By Kerry Smith The agency says \u201cunscrupulous companies bait homeowners.\u201d It\u2019s taking comments on new proposed rules that make sure homeowners have the ability to repay. WASHINGTON \u2013 The Consumer Financial Protection Bureau (CFPB) proposed a rule \u2013 based on a congressional mandate \u2013 to establish consumer protections for residential Property Assessed Clean Energy (PACE) loans. PACE loans attach to a home rather than a person. They\u2019re secured by a property tax lien on the borrower\u2019s home and often promoted as a way to finance clean energy improvements, such as solar panels. However, CFPB wants to make it easier for homeowners to understand how a PACE loan works. \u201cWhen unscrupulous companies bait homeowners into unaffordable loans with exaggerated promises of energy bill savings, this can lead to serious financial distress,\u201d says CFPB Director Rohit Chopra. \u201cWe are proposing new rules that would require sensible safeguards on these clean energy loans.\u201d Under the proposed rule, lenders must assess a borrower\u2019s ability to repay a PACE loan. The change would also provide a framework for how PACE loans are treated under the Truth in Lending Act. According to a report published by CFPB \u2013 Property Assessed Clean Energy (PACE) Financing and Consumer Financial Outcomes \u2013\u00a0PACE loans cause an increase in the number of borrowers who fall behind on mortgage payments, in addition to other negative credit outcomes. How PACE loans work Residential PACE loans finance home improvements, and borrowers pay back the loans over time through increased property tax payments. Eligible upgrades can include energy and water efficiency projects, or projects to prepare homes for natural disasters. From 2014-2020, a majority of PACE loans were for home improvements for natural disaster preparedness. Since the obligation to pay back the loan via higher property tax payments remains with the property, it gets transferred to a new homeowner if the borrower sells the property, providing the home sellers doesn\u2019t pay off any remaining amount. In the past, that has created some problems during the home sale process. Although PACE lending is authorized by local governments, private companies typically administer the programs, which can include marketing of the loans, managing originations, and making lending decisions. CFPB\u2019s newly proposed rule comes five years after President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018, which directed CFPB to create ability-to-repay rules for PACE financing and to apply the civil liability provisions of the Truth in Lending Act for violations. On Thursday, the proposed rule was published in the Federal Register, which includes details on proposed rule changes and information on how to submit comments for consideration. Public comments are due by July 26, 2023, or 30 days after publication in the Federal Register, whichever is later. \u00a9 2023 Florida Realtors\u00ae \u2715 ADVERTISEMENT Go to Source Author: kerrys<\/p>\n","protected":false},"author":4,"featured_media":8004,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/8003"}],"collection":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/comments?post=8003"}],"version-history":[{"count":0,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/8003\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media\/8004"}],"wp:attachment":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media?parent=8003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/categories?post=8003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/tags?post=8003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}