More than 30 states currently allow PACE loans, which may take first-lien position over the primary mortgage on a residence but are not currently subject to federal consumer protection requirements. The bills – S. 838 and H.R. 1958 – would subject PACE loan originators and sales personnel to Truth in Lending Act requirements, enhancing pre-origination disclosures of total loan amounts and loan terms and bringing the loans explicitly under the oversight of the CFPB.
The trades said:
PACE loans are – in substance – consumer loans secured by real property and should be subject to federal consumer protection requirements, not dependent on a patchwork of limited or non-existent state/municipal laws that do not adequately protect homeowners.
Read the letter.
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