California officials, who have been out front on helping homeowners install solar panels, are not giving up without a fight.
The programs, which give low-interest loans that are repaid through property tax bills, are in jeopardy because mortgage giants Fannie Mae and Freddie Mac have announced they won't guarantee loans for participating homes.
Placer and Sonoma counties have been leaders, but officials hoped to expand to Sacramento and much of the state.
The Bee editorial board has urged California officials to go to court or Congress if necessary to protect the clean energy initiative, which also promises to create green tech jobs.
Today, Attorney General Jerry Brown filed a lawsuit against Fannie Mae and Freddie Mac for blocking the Property Assessed Clean Energy programs. "As the nation struggles through the worst recession in modern times, California is taking action in federal court to stop the regulatory strangulation of the state's grass-roots program that is spreading across the country," Brown said in a statement.
The full news release is here, including a link to the lawsuit.
Jenine Windeshausen, Placer's treasurer-tax collector who runs the county's PACE program, applauded the lawsuit to overturn what she called "an example of bureaucracy at its worst."
Fannie Mae and Freddie Mac "have effectively derailed what is one of America's most innovative and effective job creation and conservation initiatives," she said in a statement, adding that "federal bureaucrats -- unelected and unaccountable to taxpayers -- have acted against the stated goals of the Obama administration and Republicans and Democrats across America."
Gov. Arnold Schwarzenegger also added his support to the lawsuit.
"By making it more affordable for Californians to invest in energy efficiency, PACE programs offer great benefits to California," he said in a statement.
"Achieving energy independence has always been a top priority in my administration, and it would be preposterous to do away with a program that will create jobs, provide energy savings and benefit our environment. That is why I urge a quick resolution to this lawsuit to allow the continuation of PACE programs in California."
At the same time, Congresswoman Doris Matsui, a Sacramento Democrat, signed a letter calling on the acting director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, to preserve the PACE programs -- or resign.
"We stand ready to work with you to help fulfill the promise of PACE financing and to do so in a manner that helps our nation [and] homeowners and that provides the proper safeguards for mortgage lenders. However, if you fail to do so, we ask for your immediate resignation," says the letter, which was also signed by California Reps. Mike Thompson, Michael Honda, Zoe Lofgren and Anna Eshoo.
UPDATE: The feds are not backing down either.
"In keeping with our safety and soundness obligations, the Federal Housing Finance Agency will defend vigorously its actions that aim to protect taxpayers, lenders, Fannie Mae and Freddie Mac," FHFA Acting Director Edward J. DeMarco said in a statement today.
"Homeowners should not be placed at risk by programs that alter lien priorities and fail to operate with sound underwriting guidelines and consumer protections. Mortgage holders should not be forced to absorb new credit risks after they have already purchased or guaranteed a mortgage."