Run From PACE Loans… Run

  • Not a good long term plan at all. But… if you’re a seller who’s tight on cash looking to sell your home and need to fix up a water heater, or something like that, I can see a short term usage of PACE to pay the bill now and pay off your tax bill through escrow. Seller nets their equity and buyer doesn’t absorb the costs of PACE.

    Sean hertero October 5, 2016 5:21 am Reply
    • Sean, great name. The buyer absolutely absorbs the cost of the PACE loan in the form of a higher monthly tax bill amortized over 20 years. It makes the property tax seem completely outrageous. This is a scam, pure and simple. Sold as a benefit to the home owner.

      Sean D October 5, 2016 10:50 am Reply
  • In CA, Governor Brown recently signed C.A.R.sponsored legislation requiring companies offer a TRID-like disclosure to buyers explaining the good, bad, and ugly about PACE loans. Part of the original legislation tried to eliminate the super-lien status but that did not make it into the law signed.

    Ira Bland October 5, 2016 7:04 am Reply
  • I offer my clients FHA /VA / homestyle EEM Loans . It’s a better way to finance all the energy efficient upgrades when purchasing or refinancing a home. Why do we need a program like PACE when we already have programs to help homebuyers/homeowners finance these upgrades ? I spoke at NAR 2015 in San Diego about EEM ‘s and realtors were interested, many didn’t even know the program’s existed. It might be the mortgage industries fault that PACE is growing so fast. We need to let our clients know better alternative exist to finance energy upgrades to their homes . #hplender

    Roland Macias October 5, 2016 7:13 am Reply
  • I suppose that an “up side” of this would be your property taxes are deductible?

    Susan Latham October 5, 2016 7:56 am Reply
    • I was told depend on your tax advisor?? I cancelled my contract within 3 days. Dodge a bullet.

      Chanh October 5, 2016 10:35 pm Reply
  • I actually ran into a PACE loan recently showing a house in San Diego. The extra payment was outrageous, the interest rate was at 8%, and instantly this smelled like dog poo. And, yes you guys you’re absolutely right, everything was wrong with it. The house has not sold PS.
    Let me guess, there’s a prepay?
    And, I’m pretty sure the seller was selling because of the much higher monthly payment because of their horrible PACE decision.

    Sean D October 5, 2016 10:48 am Reply
  • I know you guys have to pay for your informative videos so you do a number of things to promote yourselves which is to be expected. However, I am Realtor so I have skipped through your commercials in the past as they are largely irrelevant to me. I find your recent format change very frustrating. Today that is especially true: trying to hold me hostage for a 35 second commercial makes me sadly just delete your video. Even YouTube knows there is a limit to what people will endure.

    Andrew Wetzel October 6, 2016 11:15 am Reply
  • Great points on the issues and problems with PACE / HERO energy efficient financing programs. Less risk yet still delivering a much higher interest rate to the consumer….that’s bad business! I agree, I don’t think FHA should be allowing these PACE loans.

    I’m liking Fannie Mae’s new HomeStyle Energy loan that allows homeowners to pay off their high rate PACE / HERO loan without being dinged for cash out refinance LLPA’s as well as finance in the cost of purchasing energy efficient improvements.

    You can read more about the HomeStyle Energy loan and see why it may be a killer to the PACE/HERO program monopoly ==>

    Brad Yzermans October 6, 2016 11:20 am Reply
  • Hi ! I have a question ! I am a homeowner and currently in the market for upgrades. Windows and central a/c. I have bad credit but my mortgage is paid off. My property taxes are so cheap. I thought this program sounded too good to be true and as I am reading it looks like it might be. Can anyone suggest other agencys that might be willing to work with me? Any help would be appreciated. Thanks ! :)

    Jackie Urlik January 5, 2017 4:16 pm Reply

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