DFPI to revoke PACE administrator’s license after discovering lawyer defrauded owners
SACRAMENTO – The Financial Protection and Innovation Department (DFPI) announced today that it has has decided to revoke the Property Assessed Clean Energy (PACE) administrator’s license from Renovate America, Inc. (Renovate) after finding that one of his attorneys had repeatedly defrauded homeowners in San Diego County. This is the first time in the history of the program that the Ministry has decided to revoke the license of a PACE administrator.
Renovate recruited an entity known as Martinez Construction and authorized it to sell the PACE financing. However, Renovate did not verify that the entity posing as Martinez Construction was the real company. A fraudulent entity using Martinez Construction’s name and CSLB number, contracted with Renovate to be one of its attorneys and solicited nine owners in 2018 and 2019 across San Diego County to enter ten PACE contracts for fund clean energy projects.
The Ministry’s investigation found that the lawyer created fake email accounts and falsified consumer phone numbers so that fundraising documents could be forwarded to them for confirmation. Additionally, the owners deny signing the finance documents and claim that the voices on phone calls recorded with Renovate are not their voices, but rather those of an impersonator.
“This is a brazen attempt to defraud homeowners and it is inexcusable that Renovate has missed such clear signs of abuse,” said DFPI Commissioner Manuel P. Alvarez. “This is a clear warning to all directors of PACE that the actions of their lawyers and contractors are reflected on them and that they must be properly monitored and investigated.”
In addition, the DFPI determined that fraudulent pay stubs or salary documents were submitted in the finance package in order to increase the income level of the owners and to meet the “ability to pay” requirements contained in the package. the PACE laws. The homeowners allege that absolutely no work was done and that they only learned of the PACE valuation when they received their property tax bill, months after the PACE lien was placed on their property.
While Renovate has received and documented complaints from homeowners, dispatched people to verify whether or not work has been done, and cooperated with regulatory inquiries, Renovate has done little else to address the issues. complaints. PACE privileges remain on properties for at least nine owners. Renovate filed for bankruptcy on December 21, 2020. To assist homeowners, the DFPI is coordinating with the Western Riverside Council of Governments, the public body that issued the PACE privileges.
With these findings, Commissioner Alvarez found Renovate responsible for the actions of his lawyer, whose fraudulent practices are deemed harmful and dangerous to the public. After filing a charge to revoke Renovate’s PACE license, the company has 15 days to respond and request a hearing.
The DFPI authorizes and regulates the administrators of the PACE program, who are responsible for administering the program on behalf of a public body. Program administrators in turn authorize PACE lawyers and their agents to enter into an appraisal contract with potential owners. Lawyers and contractors are regulated by the Contractors State Licensing Board (CSLB). PACE is a financing product that allows homeowners to finance certain clean energy products and services such as solar panels, water heaters and windows. Funding is provided by government agencies which add the amount funded as a special assessment to the owner’s property tax secured by a lien on the property. If the owner does not pay the special assessment, the finance entity can assert the lien, including through foreclosure.
The DFPI continues to investigate fraudulent practices in the area of PACE funding. If you have PACE funding for your home improvement project and believe you have been the victim of fraudulent or deceptive practices, please contact the Department of Financial Protection and Innovation at (866) 275-2677 or email Ask.DFPI @ dfpi.ca .gov.
More information on PACE funding and DFPI oversight of PACE Trustees can be found at https://dfpi.ca.gov/pace/.
In addition to the administrators of the Property Assessed Clean Energy (PACE) program, the DFPI authorizes and regulates state chartered banks and credit unions, commodity and investment advisers, money transmitters, mortgage services, offering and selling securities and franchises, brokers, non-bank installment lenders, payday lenders, student loan services, escrow companies, debt collectors, hire purchase contractors , credit repair companies, consumer credit reporting agencies, debt relief companies, etc.