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Ygrene Energy Fund Inc. and Ygrene Energy Fund Florida LLC are facing a class action lawsuit alleging they engage in deceptive sales practices to entice consumers into obtaining Property Assessed Clean Energy (PACE) loans.
According to the Ygrene Energy class action lawsuit, PACE loans are a type of financing structure that allows residential property owners to opt in to a special assessment district to receive financing for energy improvements and retrofits. These loans are reportedly repaid through a yearly assessment on the owner’s property tax bill.
The Ygrene class action lawsuit was filed by plaintiffs Grachian L. Smith and Mary Jane Smith of Broward County, Fla., and Alejandro Marcey and Felicia Marcey of San Diego County, Calif. The plaintiffs claim that the Ygrene Energy defendants enlist ill-trained and self-interested home improvement contractors to sell PACE loans to homeowners.
“Ygrene aggressively markets PACE loans through a network of 3,200 home improvement contractors,” the PACE loan class action lawsuit states. “It provides little to no training to these individuals before they are set loose on unsuspecting customers.”
According to the Ygrene class action lawsuit, once the contractors receive their Ygrene certification, they are pressured to maximize their own profits.
“Through this sales force, its marketing, and loan documents, Ygrene deceives consumers into believing the PACE loan is a risk-free, no-strings-attached program, backed by government support that allows immediate energy efficiency improvements to a home in exchange for nothing more than increased tax assessments,” the Ygrene class action lawsuit says.
The plaintiffs allege that, as part of its sales efforts, Ygrene markets its PACE loans as a “smart alternative” to traditional loan products, such as a Home Equity Line of Credit (HELOC).
“In reality, the loans act just like second or third mortgages,” the Ygrene class action lawsuit claims.
According to the Ygrene Energy class action lawsuit, the defendants also conceal important information about the PACE loans, including prepayment penalties and/or fees assessed by Ygrene to avoid prepayment penalties. The Ygrene Energy class action lawsuit alleges Ygrene’s marketing materials and other sales approaches inform consumers that the loan will remain with the home and not the borrower.
However, the PACE loan does not actually remain with the home, and the PACE loans “make it impossible or nearly impossible for consumers to sell their homes without first paying off the loan and incurring a large prepayment penalty,” the Ygrene class action lawsuit says. Therefore, the PACE loan is an encumbrance that allegedly functions much like a HELOC.
The plaintiffs claim that they would not have entered into an agreement through Ygrene if they had known that the PACE loan was effectively no different than a second mortgage.
By filing the Ygrene class action lawsuit, the plaintiffs seek to represent themselves and other consumers who entered into a PACE loan facilitated by Ygrene.
The PACE loan class action lawsuit asserts claims against Ygrene for violation of the Consumer Legal Remedies Act, violations of California business law, violation of the Florida Deceptive and Unfair Trade Practices Act, fraudulent inducement, negligent misrepresentation, unjust enrichment and negligence.
The plaintiffs are represented by Kenneth S. Kasdan, Graham B. LippSmith and Jaclyn L. Anderson of Kasdan LippSmith Weber Turner LLP and Jeffrey D. Kaliel of Tycko & Zavareei LLP.
The Ygrene PACE Loan Class Action Lawsuit is Grachian L. Smith, et al. v. Ygrene Energy Fund Inc., et al., Case No. 3:17-cv-01258, in the U.S. District Court for the Northern District of California.
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139 thoughts onYgrene Class Action Says PACE Loans Are Bad For Homeowners
I need help in same spot S most of the above. How do I join a class action against Ygrene?
I had Impact windows and doors installed in 2017, no product or labor issues with the contractors, until NOW! I’m in the middle of refinancing and have been told the Ygrene loan must be paid in full, with prepayment penalties before we can close…I knew about prepayment penalties and opted to pay a higher rate, knowing I would pay the loan off early, but was never informed that this loan puts Ygrene in 1st position on your Mortgage and because of this, nobody will lend …How can I be a part of the class action law suit? Thank you
I took advantage of the Ygrene program in 2016 when I bought my Woodland Hills, CA, home. My contractor was well-versed and experienced in handling PACE projects. The amount available to me was something like 15% of the appraised value of the home, with no down payment. Sounds too good to be true, right? Well, keep in mind that a nothing is free. I had about $90,000 of improvements financed through Ygrene: double-paned windows and doors throughout the house; a new Owens-Corning Cool Roof; pavers for the driveway, entryway, back patio, and pool area; several cosmetic improvements that were included in the project.
My contractor split the project into two so as to ease the burden of repayment should I want to pre-pay the loan. Ygrene does not presently allow for partial prepayment; its all or nothing. The interest rate of 8.25% is a bit high when compared to HELOC rates. After going over my options with my contractor, I opted for an additional 1/4% on the interest to avoid the prepayment penalty.
I saw my mortgage payment balloon an additional $1200/month due to the additional property tax needed in the escrow account. That was an unpleasant surprise. And there was no vaseline around when I received that letter from my lender. Another point to keep in mind is that only a percentage of the interest portion of the loan payment is tax-deductible. Since the loan is amortized, the payment is interest-heavy for the first few years of the loan.
I had difficulty refinancing my home because the PACE loan is recorded as a lien against the home. Most lenders require the lien to be removed before the home can be refinanced. That means the loan must be paid off in full. The same goes for selling the home with a lien; it must be paid in full before the sale can go through. I had read some horror stories about people losing their homes because they couldn’t make the additional payments. Again, read the fine print. It’s a loan. If you can’t afford to make the payments, then don’t take out the loan. Also, I’ve read about folks who were out an additional $450 – $500 for unrecoverable appraisal fees due to the lien. That’s the fault of the broker. It’s up to the broker to let people know about the lien, and offer solutions to the problem. This is resolved before moving on to the appraisal. So people should not waste money on an appraisal if there are any hangups with the lien.
I was finally successful in refinancing my home because my broker was able to find a lender that would subordinate the Ygrene loan into a second mortgage (HELOC.) This process was not without it’s tough lessons. It cost an additional $50 to get a payoff quote, and $55 for processing the payoff paperwork. The toughest lesson is that Ygrene only reports to the County Recorder’s office once a year, usually in July. I successfully refinanced my home last October. I paid off Ygrene. But I still ended up owing one final inflated property tax payment because I had refinanced after the July cutoff.
I’ve checked with Ygrene this year. And with the County Recorder. The lien on my home was lifted as of July 23, 2018.
Is there grounds for a class-action case against Ygrene? I am not a lawyer. But I think based on the stories I’ve read, a case against Ygrene is pretty shaky. Most of the complaints are from disgruntled people who did not fully understand what they were getting into. Ygrene does not come to your house; the contractor does. It’s the responsibility of the contractor to let you know what’s what, and to follow through and make sure the paperwork is processed as agreed to. My experience was not nearly as dire as some that I’ve read here and on Yelp. I was under no illusion that this was a loan. I was not deceived into thinking I was getting something for free. My contractor was available to me even as I was trying to get out from under the lien situation. Every time I have called Ygrene, I have spoken to someone who was knowledgable and capable of answering my questions.
I predict that this class-action lawsuit will end up going in favor of Ygrene. There is some fine print that people overlook; it’s imperative to read your contract and understand what you’re getting into. I am a satisfied customer. But would I do it all again? No. I’d just get a HELOC instead.
Same here. How can I join the class action?
The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!
This whole home improvement program is a total scam!! I got in through a company call GE Solar Mr. Soulie was my representative. First GE solar hired a contractor who was operating with a fake contractor license, he disappeared suddenly and left everything he had started damp. He hired a second contractor who claimed was licensed but did a beyond poor job!! I ended up with a 52,000 debt my mortgage payment double up. Can some please advise what is the best step to take. How can they be ripping people of and getting away with it???
Please advise where The class action lawsuit is going on because we just replaced our roof October 2017 with FH I a and we now have two active leaks on our roof we would like to also being part of the action class with why green as we two were told that the loan stays with the next buyer which is not the case
My wife and I used this program to upgrade our windows, 1 door and 1 skylight to hurricane products. We received a discount on our home owners insurance that covers over half the increase in our mortgage payment.
From what I have read here we are in the same place all of you are.
Our west facing windows are leaking and getting the contractor out here to address the problem is a big problem.
The PACE loan I got from Ygrene in 2016 just may well cost me the sale of my home in CA. I asked the questions on early penalities was told there were no early payoff penalities. Just asked again two days ago to ensure the loan can be transferred to new owner – yes it is automatically done when the Deed is recorder. IF the lender does not require it to be paid off first. They know darn well no leader is going to be second in line when loaning the cost for a purchase.
I contact Willdan Finanaical Services today to get the payoff amount and Balance and there is a $50 fee for this information.
This whole process was such a scam and filled with information just shy of being illegal.
NEVER WOULD I RECOMMEND this type of loan to anyone.
I don’t see any result of this settlement, I can’t refinance my mortgage because of this and top of that if you want a payoff balance you have to pay a third party $25.00??
So, what can I do? or What should I do?
Totally scammed by these people. And their contractor did a horribly job.
Went to refinance… was told I can’t. They never disclosed this. I was told if we sale the house the loan goes with it.. again.. a lie!!! So pissed off. Try and do the right thing by going energy efficient and you get screwed! Don’t know how I will ever get out from underneath this!!!