Suffolk County Homeowners Face Foreclosure Nightmare as Green Energy Dreams Turn Into Financial Disasters

What was supposed to be a sustainable solution to rising energy costs has become a foreclosure crisis threatening thousands of Suffolk County homeowners. PACE borrowers were more likely to fall behind on their first mortgage than people who chose not to finance home improvements with PACE. PACE loans tend to be more expensive – around five percentage points higher — than first mortgages, even though PACE loans get paid at a foreclosure sale before first mortgages.

The Hidden Dangers of Solar Financing in Suffolk County

Suffolk County has embraced solar energy with enthusiasm. From 2000 through 2023, Suffolk County has increased its solar energy capacity from 0 MW to 215 MW. However, this green energy boom has created an unexpected crisis for homeowners who financed their solar installations through Property Assessed Clean Energy (PACE) programs and other problematic financing arrangements.

Homeowners who cannot afford the increased property taxes from a PACE contract could lose their homes through a foreclosure action. The situation is particularly dire because unlike missing a mortgage payment — where homeowners often have time to negotiate — tax liens move fast, leaving little room to fight back.

How Solar Loans Become Homeowners’ Worst Nightmare

The problem stems from how these financing arrangements work. The solar company or lender will file a lien against the panels on your home when you enter a PPA or lease. This means that, if you can’t pay back the loan or lease, you will lose the panels. Even worse, many homeowners discover that the UCC-1 lien or fixture filing is filed for practically every consumer who leases a solar system and is only there to protect the owner of the system if you default on your payments or your home is foreclosed.

The financial mathematics often don’t work in homeowners’ favor. Ortiz estimates his solar panels are saving him about $150 a month in energy costs. His PACE Home Run financing application shows a $41,500 loan would add $2,632 to his property tax bill. That would add an extra $219 to his house payment each month. According to the PACE Funding Agency document, Ortiz would have paid $81,715 in assessments over 30 years. At $150 a month, it would take him 544 months… or 45 years…to save that much money.

The PACE Financing Trap

PACE financing has become particularly problematic for Suffolk County residents. PACE loans increased a homeowner’s property taxes by about $2,700 per year on average – an increase of about 88%. The average PACE loan had a 7.6% interest rate, which is much higher than average interest rates for home purchase or home equity loans. In the two years following PACE loan origination, the mortgage delinquency rate for PACE loan borrowers with a pre-existing mortgage increased by 2.5 percentage points.

Another possible selling roadblock is that a PACE loan is a first lien on the property. This means if a borrower (your potential buyer) can’t make the payments, the PACE lenders must be paid back before the mortgage lenders in the case of foreclosure or default, which is risky for lenders.

Real Stories of Foreclosure

The crisis isn’t theoretical. Instead, he found himself in a nightmare: a fight for his home he never saw coming. “I got a notice that my house was going to be for sale on the courthouse steps on the 21st of this month,” Ortiz told WFTS in Tampa Bay. Cases like this are becoming increasingly common as homeowners discover their financing didn’t materialize as promised or the financial burden becomes unsustainable.

Legal Protection for Suffolk County Homeowners

If you’re facing foreclosure related to solar panel financing in Suffolk County, time is critical. Foreclosure law deals with the complex legal process through which a lender can seize a property from a borrower who defaults on their mortgage payments. This process can be complicated, involving paperwork, deadlines, and legal procedures.

Working with an experienced Foreclosure Attorney Suffolk County can make the difference between losing your home and finding a viable solution. Reviewing Your Mortgage Documents: Your attorney can review your mortgage documents to identify any irregularities or potential violations of state or federal law. This can help you understand your legal rights and obligations and determine if your lender has acted unlawfully. Defending Your Home Against Foreclosure: If you are facing foreclosure in Suffolk County, your attorney can represent you in court and help you defend your home against foreclosure. This could include challenging the foreclosure process, raising defenses against foreclosure, or seeking a loan modification or other alternative to foreclosure.

Protecting Yourself from Solar Financing Scams

For Suffolk County residents considering solar panels, it’s crucial to understand the risks. Some salespeople and building contractors have in the past misrepresented the cost of PACE projects and the financing, claiming no money down or out-of-pocket-costs are required and giving the impression these services are free. PACE is NOT a free government program. Homeowners must pay for a PACE contract through increased assessments in their annual property tax bills.

Before signing anything, homeowners should ask, how the loan is repaid, whether it affects property taxes and if it carries foreclosure risks. Vetting both the contractor and the financing program is just as important. Checking online reviews, consulting local consumer protection agencies and verifying a company’s standing with the Better Business Bureau (BBB) can help avoid shady deals.

The Road Ahead

The Consumer Financial Protection Bureau has recognized the severity of this crisis. Today, the Consumer Financial Protection Bureau (CFPB) finalized a rule mandated by Congress that applies existing residential mortgage protections to Property Assessed Clean Energy (PACE) loans. Because of concerns about subprime-style lending that puts homeowners at risk of losing their home, Congress required the CFPB to enhance protections. The rule will ensure that PACE borrowers have the right to receive standard mortgage disclosures that allow them to compare the cost of the PACE loan with other forms of financing, and the lender will be responsible for ensuring that the borrower is not set up to fail with an unaffordable loan.

However, these protections won’t help homeowners already trapped in problematic financing arrangements. If you’re a Suffolk County resident facing foreclosure related to solar panel financing, don’t wait. With the help of an experienced foreclosure attorney from The Frank Law Firm P.C., you can navigate the foreclosure process with confidence and work toward a favorable outcome. Remember, time is of the essence in foreclosure cases, so call 516-246-5577 today to get the help you need.

The dream of clean, affordable energy shouldn’t become a homeowner’s worst nightmare. With proper legal representation and understanding of your rights, it’s possible to fight back against predatory lending practices and protect your most valuable asset – your home.