Here's something you might be interested in.
Ask a Hipster — Advice you didn't know you needed
Big Screen — Movie commentary
Blurt — Music's inside track
Booze News — San Diego spirits
Classical Music — Immortal beauty
Classifieds — Free and easy
Cover Stories — Front-page features
Drinks All Around — Bartenders' drink recipes
Excerpts — Literary and spiritual excerpts
Feast! — Food & drink reviews
Feature Stories — Local news & stories
Fishing Report — What’s getting hooked from ship and shore
From the Archives — Spotlight on the past
Golden Dreams — Talk of the town
The Gonzo Report — Making the musical scene, or at least reporting from it
Letters — Our inbox
Movies@Home — Local movie buffs share favorites
Movie Reviews — Our critics' picks and pans
Musician Interviews — Up close with local artists
Neighborhood News from Stringers — Hyperlocal news
News Ticker — News & politics
Obermeyer — San Diego politics illustrated
Outdoors — Weekly changes in flora and fauna
Overheard in San Diego — Eavesdropping illustrated
Poetry — The old and the new
Reader Travel — Travel section built by travelers
Reading — The hunt for intellectuals
Roam-O-Rama — SoCal's best hiking/biking trails
San Diego Beer — Inside San Diego suds
SD on the QT — Almost factual news
Sheep and Goats — Places of worship
Special Issues — The best of
Street Style — San Diego streets have style
Surf Diego — Real stories from those braving the waves
Theater — On stage in San Diego this week
Tin Fork — Silver spoon alternative
Under the Radar — Matt Potter's undercover work
Unforgettable — Long-ago San Diego
Unreal Estate — San Diego's priciest pads
Your Week — Daily event picks
Solar-power financing could spell trouble
"I hate to see people lose their homes over something I was involved with.”
The owner of a North County solar-power company says he sees the next housing bubble bursting on the horizon. While it’s the hand that feeds much of his business now, he says it’s the same trick that financial institutions used almost a decade ago, which caused our recent recession and housing-market crisis.
“Homeowners will start losing their homes again with easy-to-qualify loans,” said the business owner, who asked not to be identified.
The HERO program — Home Energy Renovation Opportunity — has been touted statewide with direct-mail pieces and on radio and TV. Now approved in 48 California counties, the program is expanding to Missouri and Florida, with the state and federal governments' blessings.
A homeowner can qualify for upgrades in heating, air conditioning, energy-saving windows, roofs, drip irrigation systems, artificial turf, drought-tolerant landscaping, and solar installations — 50 types of projects.
“I know people that have received a whole kitchen and bathroom remodel in the name of water conservation,” said the business owner.
Homeowners with a little equity can get 100 percent financing with no money down, quick approvals, and no credit check. (I received a direct-mail piece offering me up to $49,500 in home improvements.) The program provides HERO-approved contractors to perform the services.
The problem, says the business owner, is the loans are repayable through one’s property taxes, for up to 20 years.
“Now, once again, people will find themselves with payments they can’t afford, this time with property taxes rather than last decade’s [home equity line of credit] stated income/signature second mortgages. When they can’t pay, they’ll start losing their homes."
Dennis Smith of Encinitas’ RE-MAX by the Sea real estate agency sees other problems with HERO. Because it’s on a property’s tax, a HERO loan will take first position in the debtor line-up, should a lien be imposed on the property for back-taxes owed to the county.
“Lenders probably won’t refinance if they could end up in second position,” said Smith. “It will also discourage the sale of the house, as a new buyer may not want to assume that additional debt.”
Smith says someone considering a HERO loan should determine if they can truly afford an increase in property-tax payments. (Based on the offering received in the mail, my property taxes could increase well over $2000 annually.)
The HERO program was allowed to be created under the federally approved Property Accessed Clean Energy Act. Governor Jerry Brown awarded his Environmental and Economic Leadership Award to HERO. According to a news release, since 2011, HERO has created 14,900 jobs, provided a total of $1.75 billon in home-efficiency upgrades, saved 11.2 billion kilowatts of electricity and 5.61 billions gallons of water.
“This is a big collusion between the construction industry, home-improvement manufacturers, and financial institutions. They schemed to get the support of the government to make it look like it's okay,” said the solar business owner.
“If you can’t afford to pay up front for home improvements, you shouldn’t be doing them,” he said. “If I wasn’t a HERO-approved solar company, it would hurt my business. But I hate to see people lose their homes over something I was involved with."
UPDATE 11/16, 7:30 a.m.
Greg Frost, a PR representative for Renovate America, objects to the North County solar-power company owner's opinion that the HERO program could result in a new housing crisis.
"[PACE] underwriting criteria are designed to avoid the kinds of disaster scenario [the writer] presents," writes Frost. "There have been ZERO foreclosures initiated by PACE providers across more than 100,000 assessments to date. Across the more than 80,000 California homes that have used HERO financing, there have been 28 foreclosures initiated by primary mortgage holder, not by HERO. The California Loan Loss Reserve Fund — set up for the PACE industry — has never been tapped."
Here's something you might be interested in.
Solar-power financing could spell trouble
"I hate to see people lose their homes over something I was involved with.”
Solar-power financing could spell trouble
"I hate to see people lose their homes over something I was involved with.”
The owner of a North County solar-power company says he sees the next housing bubble bursting on the horizon. While it’s the hand that feeds much of his business now, he says it’s the same trick that financial institutions used almost a decade ago, which caused our recent recession and housing-market crisis.
“Homeowners will start losing their homes again with easy-to-qualify loans,” said the business owner, who asked not to be identified.
The HERO program — Home Energy Renovation Opportunity — has been touted statewide with direct-mail pieces and on radio and TV. Now approved in 48 California counties, the program is expanding to Missouri and Florida, with the state and federal governments' blessings.
A homeowner can qualify for upgrades in heating, air conditioning, energy-saving windows, roofs, drip irrigation systems, artificial turf, drought-tolerant landscaping, and solar installations — 50 types of projects.
“I know people that have received a whole kitchen and bathroom remodel in the name of water conservation,” said the business owner.
Homeowners with a little equity can get 100 percent financing with no money down, quick approvals, and no credit check. (I received a direct-mail piece offering me up to $49,500 in home improvements.) The program provides HERO-approved contractors to perform the services.
The problem, says the business owner, is the loans are repayable through one’s property taxes, for up to 20 years.
“Now, once again, people will find themselves with payments they can’t afford, this time with property taxes rather than last decade’s [home equity line of credit] stated income/signature second mortgages. When they can’t pay, they’ll start losing their homes."
Dennis Smith of Encinitas’ RE-MAX by the Sea real estate agency sees other problems with HERO. Because it’s on a property’s tax, a HERO loan will take first position in the debtor line-up, should a lien be imposed on the property for back-taxes owed to the county.
“Lenders probably won’t refinance if they could end up in second position,” said Smith. “It will also discourage the sale of the house, as a new buyer may not want to assume that additional debt.”
Smith says someone considering a HERO loan should determine if they can truly afford an increase in property-tax payments. (Based on the offering received in the mail, my property taxes could increase well over $2000 annually.)
The HERO program was allowed to be created under the federally approved Property Accessed Clean Energy Act. Governor Jerry Brown awarded his Environmental and Economic Leadership Award to HERO. According to a news release, since 2011, HERO has created 14,900 jobs, provided a total of $1.75 billon in home-efficiency upgrades, saved 11.2 billion kilowatts of electricity and 5.61 billions gallons of water.
“This is a big collusion between the construction industry, home-improvement manufacturers, and financial institutions. They schemed to get the support of the government to make it look like it's okay,” said the solar business owner.
“If you can’t afford to pay up front for home improvements, you shouldn’t be doing them,” he said. “If I wasn’t a HERO-approved solar company, it would hurt my business. But I hate to see people lose their homes over something I was involved with."
UPDATE 11/16, 7:30 a.m.
Greg Frost, a PR representative for Renovate America, objects to the North County solar-power company owner's opinion that the HERO program could result in a new housing crisis.
"[PACE] underwriting criteria are designed to avoid the kinds of disaster scenario [the writer] presents," writes Frost. "There have been ZERO foreclosures initiated by PACE providers across more than 100,000 assessments to date. Across the more than 80,000 California homes that have used HERO financing, there have been 28 foreclosures initiated by primary mortgage holder, not by HERO. The California Loan Loss Reserve Fund — set up for the PACE industry — has never been tapped."
Comments