Gov. Jerry Brown, joining Obama administration officials Tuesday to promote a federal loan program for home energy improvements, lit into mortgage giants Fannie Mae and Freddie Mac for what he called their “silly” reservations about the program.
“They’re stubborn, they’re unreasonable, they’re acting like East Coast bankers,” the Democratic governor said on a White House call with reporters. “I can say that, because the other politicians can’t.”
Brown’s remarks came as Obama set a new goal of bringing 1 gigawatt of solar energy to low- and moderate-income families by 2020, a dramatic expansion of the administration’s existing goals. The U.S. Department of Housing and Urban Development and the Department of Veterans Affairs released new guidance to ease financing surrounding the sale of homes with improvements funded by the Property Assessed Clean Energy program, or PACE. The program lets homeowners make loan repayments for energy upgrades along with their property taxes.
More than 70,000 California property owners participate in the program, according to the California Solar Energy Industries Association, saving homeowners $2.5 billion in utility bills.
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But Fannie Mae and Freddie Mac have long expressed concern about mortgages on properties involved with PACE, in which the loans are secured by priority liens on the property. Fannie Mae and Freddie Mac have said they will no longer purchase mortgage loans secured by properties with outstanding PACE loans, hampering people’s ability to refinance or to sell to buyers who need a mortgage.
The program is the focus of legislation that has been the subject of intense lobbying in recent months.
Assembly Bill 2693 aims to provide more “truth in lending” disclosures to PACE borrowers, including a warning that the lien may make it hard to refinance or sell. Banks, credit unions and title companies are among the bill’s supporters, while the solar industry, environmental groups and energy-efficiency construction companies oppose it.
On the call Tuesday, Brown said energy upgrades would improve home values – lessening risk – and that HUD and the Department of Veterans Affairs were “doing what Fannie and Freddie say you can’t do.”
The fourth-term Democrat said he has been pressing the mortgage lenders unsuccessfully since returning to office in 2011. He called their concerns “silly.”
Reporter Jim Miller contributed to this report.
David Siders: 916-321-1215, @davidsiders