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Lawsuit Alleges Low-Income Homeowners Were Manipulated Into Getting PACE Green Energy Loans

SAN FRANCISCO (KPIX 5) -- As Project Home previously uncovered, a green energy program that targets low-income homeowners continues to leave a trail of financial hardships and foreclosures in its wake. Now, KPIX 5 has gotten an exclusive interview with the state agency tasked to oversee the troubled program.

"Definitely I think we have seen some predatory behavior," said Maria Luisa Cesar, a commissioner with the Department of Financial Protection and Innovation, the agency tasked to oversee California's so-called PACE program, which stands for Property Assessed Clean Energy. "We've seen the program mis-characterized as a free government program, which it's not, we've seen instances where documents have been forged where contractors have been paid without doing any of the work. We've also seen companies utilize these deceptive practices and target immigrant non-English speaking communities."

Gloria Sanchez is one example. In a class-action lawsuit, she claims she was hammered with calls and text messages from a PACE solicitor called Garantia Solar. She says the salesperson told her a program created by former president Obama required homeowners to have solar panels installed on their property by 2020. And she could do it, for no money down and just $800 dollars more a year on her property taxes.

"Practically the panels would be free," said Sanchez.

But when she went to refinance her home came a shock: A tax lien on her property for almost $13,000 placed by a company called Pace Funding Group had to be paid off first. Not only that, she says the panels don't seem to be working and her PG&E bill has not gone down.

"On my PG&E bill I don't see savings," said Sanchez.

Sanchez signed her loan in 2018 after a new law went into effect that requires PACE program administrators like Pace Funding Group to get confirmation over the phone that the homeowner understands the terms of the contract and can afford to repay it. Since then, even more consumer protections have been enacted. But critics say it's still not enough.

"One of the big problems with these PACE loans is that they're really targeted at people who are house rich, but cash poor," said Jaramillo, an attorney with Housing and Economic Rights Advocates, a non-profit that helps low-income Californians with financial problems.

He says complaints about PACE loans come all the time.

"We're still seeing people who get lured into these PACE loans whose property taxes just skyrocket and become unaffordable to them. So the standard being used to assess ability to repay, if it's being used at all, is really not protecting the consumer in many cases." said Jaramillo.

He is co-counsel in Sanchez's class-action lawsuit that accuses multiple players involved of fraud and negligence.

"I think there's been an absolute failure of these program administrators to ensure that their paid solicitors and agents are complying with the law," said Jaramillo.

He says one of the biggest problems continues to be the electronic signing process for the financing contract.

"The electronic signature system is just too easy for the contractor sales person to manipulate and either forge the consent of the homeowner, or pressure them into signing documents that either they can't understand because it's on a little cell phone screen, or it's not in the language that they understand," said Jaramillo.

Sanchez says that is what happened to her.

"They were in Los Angeles and they told me but we can do it by signing on the phone. That is how I fell in the trap, by signing over the phone," said Sanchez.

We reached out to Pace Funding Group, the program administrator based in Los Gatos that put the tax lien on Sanchez's home. The company sent a response which can be seen here in its entirety.

Garantia, the solicitor that talked Sanchez into signing the PACE loan, did not have a contractor's license at the time as required by law. It appears to no longer be in business.

Sanchez's contractor Complete Solar based in San Ramon, also did not return our calls.

The company is licensed but we discovered it's currently under disciplinary order for false, misleading and deceptive advertising. Yet Complete Solar is still an approved PACE contractor with DFPI.

"I think we have some work to do in continuing to get resources out to community members so that they understand what their rights are and how institutions like the California DFPI can offer some protection and some redress, said DFPI's Maria Luisa Cesar.

The agency received 370 PACE related complaints since it took on oversight role in 2019, 78 of them specifically regarding the Pace Funding group. But so far DFPI has only taken administrative action three times, involving other companies.

We asked DFPI's Cesar: "The big overarching question for so many homeowners is, should they feel confident that this program has the correct oversight and is operating as it says it is?" Her response: "So I think that's a great question. I think the reality is that in any industry, you're going to have bad actors. And we are trying to, as a state financial regulator, root out those bad actors as quickly as possible."

Sanchez's class-action complaint alleges Spanish-speaking homeowners are purposefully being targeted for PACE loans with high pressure sales and fraudulent tactics. According to the complaint the owners of Garantia, the solicitor in Sanchez's case, are still promoting the loans under a new name, Greenday Finance.

If you have complaint about a PACE loan, DFPI wants you to file a report with them at

To file complaints with the Contractors State License Board, visit


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