Home improvement loan program gets axed following fraud allegations
LA County’s PACE program has been sued for failure to regulate private lenders and unscrupulous contractors
Los Angeles County has ended its controversial home improvement loan program after allegations that unscrupulous contractors were taking advantage of consumers and that lenders acted without oversight.
The PACE program was launched in 2015, and the county has been sued in the past for allegedly failing to regulate private lenders it partnered with to issue loans, according to the Los Angeles Times.
The PACE program — Property Assessed Clean Energy — provided loans to homeowners who purchased energy efficient upgrades. Often contractors themselves signed up homeowners for the program then misrepresented the loan terms or pushed them to take on debt they could not afford, according to the report.
The L.A. City Attorney’s Office sued one of those contractors last year for allegedly defrauding homeowners for the construction of so-called granny flats financed through the program. The contractor, Eco Solar Home Improvement, targeted Spanish-speaking homeowners, according to the allegation.
Some homeowners have also accused contractors of forging their signatures on loan documents. PACE programs in other California jurisdictions have been similarly criticized.
Homeowners with outstanding PACE loans will still have to pay those loans back. The county’s Department of Consumer and Business Affairs will also continue to assist homeowners with loan issues. [LAT] — Dennis Lynch