Working For Jobs

by Jonathan Hiskes.

California Attorney General (and candidate for governor) Jerry Brown sued Fannie Mae and Freddie Mac today
for blocking Property Assessed Clean Energy (PACE) programs. There’s a good chance that Fannie and Freddie’s legal costs from defending this suit will add up to more than
they ever stood to lose from the clean-energy programs, but
here we are. The town of Babylon, N.Y., has
also been threatening to sue over the same issue, but Brown was quicker. 

Todd
Woody reports at
the New York Times’ Green blog:

The
suit alleges that the [actions of the Federal Housing Finance Agency, which regulates Fannie and Freddie,] violated California law, which
authorizes PACE programs, and are “severely hampering California’s efforts to
assist thousands of California homeowners to reduce their energy and water use,
help drive the state’s green economy, and create significant numbers of
skilled, stable and well-paying jobs.”

“The
actions of these government-sponsored, shareholder-owned private corporations
have placed California’s PACE programs—and the hundreds of millions of
dollars in federal stimulus money supporting them—at immediate risk while
benefiting their own pecuniary interests,” the suit states.

The
housing agency said it would mount an aggressive defense. “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,” Edward DeMarco, the agency’s acting director, said in a
statement.

“Homeowners
should not be placed at risk by programs that alter lien priorities and fail to
operate with sound underwriting guidelines and consumer protections,” he said.
“Mortgage holders should not be forced to absorb new credit risks after they
have already purchased or guaranteed a mortgage.”

Interesting:

The
suit’s most novel allegation is that the agency violated federal environmental
law by not conducting a review of the potential environmental impact of
restricting PACE programs.

“F.H.F.A.
has effectively precluded PACE programs in California and deprived California
and its citizens of the associated residential energy and water efficiency and
renewable energy benefits, thereby significantly impacting the human
environment, without completing the required environmental review under the
National Environmental Policy Act,” the suit states.

After Fannie and Freddie warned lenders away from PACE, many municipalities froze their PACE programs.  But on Tuesday, Sonoma County, Calif., voted to reopen
its Energy Independence PACE program, and Missouri’s governor signed
PACE-enabling legislation (joining at least 22 other states).  Clearly many people
have confidence that this model will survive once the Fannie/Freddie dispute
gets resolved.

Related Links:

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