American Elephants

Being President is a Lot Harder Than Obama Expected. by The Elephant's Child

It’s so hard to get things right!  The Obama administration program to promote energy efficiency in American homes appears to have met insurmountable resistance from financial regulators who are worried about its effect on residential mortgages.

Under the program, known as “Property Assessed Clean Energy” (PACE), the obligation to repay the government loan remains with the home, transferring to a future owner if the home is sold.  Because PACE financing is a s so-called “first lien” on the property, if the home lands in foreclosure, mortgage lenders do not have first call in pursuit of repayment.

Fannie Mae and Freddie Mac left the program’s future in doubt in May, when they sent lenders a notice that they do not accept mortgages that are subordinate to other loans.  Fannie and Freddie dominate the market for home loans.  Federal financial regulators have made clear that they are also uncomfortable with PACE loans that take first priority.  No final decision has been announced.  The Energy Department is seeking protection for homeowners who have already taken on PACE Financing.

The program is “emblematic of President Obama’s effort to build the economy by reducing reliance on fossil fuels.” Well, there’s the problem, right off the bat.  The plan was to provide loans for such improvements as solar panels or new windows, and then allow homeowners to repay the money over many years through surcharges on property tax bills.

On February 17, 2009, President Obama and Vice President Biden toured the solar array at the Denver Museum of Nature and Science in Denver, Colorado.  The solar panels that they inspected will take 110 years to pay for themselves.  The particular panels they saw are expected to last for 20—25 years.

The government has begun telling municipalities to think of other ways to use the millions in economic stimulus funds that had been set aside for this green initiative, officials said.  Just be sure to spend it, I guess.  No possibility of returning it to taxpayers, instead of the slush fund.

Three Reasons Why the Financial Bill Won’t Fix Anything. by The Elephant's Child

Here’s Nick Gillespie from Reason to explain why the New Financial Regulations aren’t going to make anything better, with guest appearances by Treasury Secretary Timothy Geithner.  Why does Congress put so much effort into such pitiful legislation?

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