Ripe and Ready; Or Not?
Time was that if you did an internet search for the term "green mortgage" more than a million sites came up and there were some pretty creative ways banks were marketing the idea. Some banks would offer a discount on the rate, others would offer a reduction in closing costs. None of the options was truly a "green mortgage" backed by the secondary market; instead these were small incentives that individual companies would use--not unlike the days of offering free toasters to new account holders.
Fast forward to post-financial crisis and the public humiliation of the stalwarts, Fannie Mae & Freddie Mac and now "green mortgage" might lead you to articles like the one Dave was interviewed for that ran in the Chicago Tribune. (You can check it out at:http://tinyurl.com/CTInterviewsDave. And no, our company is not in "Stanton, WA"; that should be "Stanwood, WA") You'll also find in your internet search that energy efficient mortgages (EEM's) are "all the rage" as if they are something new. Which, of course, they are not. But, better late than never, as they say. Maybe now, some 20 years after they were conceived of, they'll begin to catch on. Who knew?
We need a more effective tool than a bigger mortgage.
We can make special Home Equity Loans for energy upgrades attaching them to properties and not borrowers by putting them in special tax assessment districts. PACE Property Assessed Clean Energy loans are allowed in most states.
The loans can come from, and be serviced by banks.
In an energy mortgage your energy upgrade value can be wiped out in market based sales or foreclosures. If energy upgrades are attached to the property in a PACE district they cannot be wiped out in a sale or foreclosure. In this way, the beneficiary always gets to pay for the benefit and not the former owner.
Girard Gurgick
Ashburn, VA