What is the Federal Government up to now?

Property Assessed Clean Energy = PACE Programs
Home Energy Renovation Opportunity = HERO Loans

The Federal Government after the 2008 financial collapse got together to promote and help stimulate the failing economy by Encouraging Environmental Improvements on Residential Properties. These Projects or home improvements would be offered through the PACE program with HERO loans = Home Energy Renovation Opportunity Loans

Here are the selling points for HERO Loans.
1. HERO Loans are recorded as a Special Voluntary Tax Assessment, payments are made through a line item on the
borrowers property tax bill.
2. HERO Loans offer a flexible re-payment terms of 5 - 20 years.
3. HERO interest rates are determined by the amount of equity in the home from 3.00% to 7.99%
4. Loan approval is based on the Property Equity Only - with no impact on borrowers credit rating or personal FICO
5. No Upfront Costs - Hero Finances the total cost of the borrowers project including all fees and labor costs.
6. Potential Tax Benefits - The interest on the HERO payments may be tax deductible.
7. Transfer-ability - If the borrower sells the property, the remaining balance transfers to the new owner.
8. Potential Increase in the value of the property from home improvements.
9. Loan amount cannot exceed 15% of the appraised value of the property up to $700,000.00 and 10%
above $700,000.00 Maximum HERO Loan amount up to $237.000.00

Seriously - These new loans are Property Qualifiers only, No-Upfront out of Pocket Fees, Interest rates from 3.00%
HERO Loan amounts up to $237,000.00, Special Voluntary Tax Assessment is Assumable and Transferable and Potential Tax Benefits.

Wow really, Sign me UP, but is our government really helping our citizens? or what is the Real motive behind these Government backed Loans?

Here is the break down - HERO Loans can be funded by Private Lenders or Public Funds (Most are funded by Government Bonds). The Bonds are repaid through the homeowners increase assessments added to the borrowers yearly property tax bill.

Wait for it, Wait for it, Ok here it is the major dispute and problem with the mechanism used to record the HERO loans.
The Government designed and backed these HERO loans. They have created a super priority status over traditional lenders deeds of trust, even if the HERO financing is placed months or years after the lenders deed of trust. The Hero Loan is always in the 1st Position to get paid. Because its attached and recorded with the Property Tax assessments, making it a FIRST priority to be paid PERIOD.

Why do you think the government changed the rules a bit, and now allow their HERO backed loans to have super priority status (1st Position) over the traditional conventional Banking institutions. Could it be that the Banks are being punished by creating the massive financial bubble that imploded in December, 2008 or is it something else?

Ok my thoughts here - I'm a property owner and to be honest with you the HERO loans might still sound good for some people. For 25years I was a Licensed Real Estate Agent, I was involved heavily in securing Mortgage Loans, 1st TD's, 2nd TD's, HELOC and many other creative financing trust deeds. Worked with Several Large Mortgage Lending Companies and Banks.

When the conventional Banking institutions learned about these new government backed created HERO Loans with super priority 1st positions they revolted. Now their deeds of trust and positions have been compromised and in the event of any property going into the foreclosure the lenders on those properties stand to lose more of their investment .
Freddie Mac and Fanny Mae Loans represent 90% of all conforming originating Real Estate Loans since 2008 when the financial bubble crashed.

So Freddie and Fannie have produced new guidelines for any Refinance and new purchases Loans, stating they would not secure any loan on a property that currently has a PACE or HERO loan attached under a voluntary tax assessment.

So the in-house war begins What I mean by that is Fannie Mae and Freddie Mac are government sponsored enterprises (GSE). Since 1968 a publicly traded company, founded in 1938. The corporations purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage backed securities (MBS). By purchasing these Loans they allowed local banks and lenders to continue creating new loans.

But here is my point Fannie Mae and Freddie Mac created and produced the industries guidelines for which they would purchase the loans created by these local lenders and banks. You know the ones prior to the 2008 collapse that allowed STATED Income Loans, STATED Value Loans and only drive by appraisals 100% financing on 1st T.D.s, Fico's in the low 600s. Everybody was buying these over-inflated homes being built by developers. 2nd Mortgages up to 125% of the homes current stated value, No-points No-Cost, Cash-out refinancing up to 95% LTV. OMG it was feeding frenzy. It was a crazy time if a borrower had a pulse rate I could probably get them a loan.

Before you start passing judgment and claiming oh it was the bankers, the lenders or Mortgage originators fault
for origination these types of Loans. Now think about it - How could the local banks, Mortgage lenders originate these
Loans if they could NOT sell them on the secondary market to Fannie/Freddie Mac. So the real cause I believe is the Government Backed enterprises Fannie Mae and Freddie Mac, if they didn’t produce the guidelines to buy these shit loans in the first place nobody would have originated them PERIOD.

So anyhow let’s get back to the current problem at hand
Pace Programs and Hero Loans were also created and backed by the Federal Government, just like Fannie and Freddie Mac. So here lies the oxymoron of the situation - they are all created and operated by our federal government (Fannie/Freddie, Pace/Hero). It’s like the right hand doesn’t know what the left hand is doing and nobody wants to compromise and figure this out.

So in the meantime The government is again producing guidelines for these shitty home improvement loans, in effect
screwing the homeowners because now if that property has little equity in the Combined loan to Value with the hero loans. The homeowner cannot refinance and in most cases cannot sell their homes unless this Special Voluntary Tax assessment is paid off first.

And here is my final rant of this post - a large majority of these Hero loans are being completed and attached to borrowers properties. They are being used for Solar Panels, complete systems, the panels, installation and all costs associated with the 20 year term and when the homeowner asks is that HERO loan assumable if I sell my house, the Solar sales agent says YES it is fully assumable. However the homeowner is not asking the right question here, he should be asking if my property is attached with that HERO loan will another lender assume my HERO loan? and the answer is 92% of the time the new lenders WILL NOT assume the hero loan.

So I want your opinions what is the government up too this time?
I would like to hear from people in the banking and lending institutions what they think?
Even People who work in the Solar Panel industries, what do they think?