Consumer RightsEconomic JusticeHousing Justice
Seeking Justice for L.A. Homeowners: Challenging Predatory Home-Improvement Loans in L.A. County
Case Overview
our Clients (Ocana v. Renew Financial)
our Clients (Nemore v. Renovate America)
Property Assessed Clean Energy (PACE) was conceived over a decade ago as a way to help homeowners access financing to install otherwise prohibitively expensive clean energy upgrades, such as solar panels. Instead, this initiative has burdened thousands of low-income homeowners with high-interest loans that they cannot afford. Even more troubling, PACE has disproportionately been peddled to communities of color and to elderly and non-English speaking homeowners.
Homeowners who want to install energy-efficient home improvements can apply for PACE loans from finance companies or “PACE Administrators.” The loans are often sold door-to-door by contractors, who may not fully explain the financial implications or risks involved, leaving homeowners vulnerable to predatory lending practices. PACE loans require no money down but are secured by the equity in the homeowner’s property, like a traditional mortgage. However, unlike a traditional mortgage, PACE loans frequently do not provide the most basic consumer protections, such as checking to make sure that homeowners can afford the payment.
The PACE payment amount is added to the homeowner’s annual property tax bill as a special line-item assessment. Because these loans are paid as part of a homeowner’s property taxes, they get a “first lien” position, which means that if the home is sold or foreclosed upon, PACE loans get paid off first before any other secured loans, such as a mortgage. A homeowner who cannot afford to pay the increased property taxes either directly or as part of their mortgage payment.
In April 2018, homeowners in Los Angeles County brought two related class action lawsuits against Los Angeles County and its PACE administrators, Renovate America (Renovate) and Renew Financial (Renew). The lawsuits alleged that, in implementing the PACE program, the County, Renovate, and Renew committed financial elder abuse, breached the contract between the County and its administrators, and entered into unlawful contracts with homeowners. The plaintiffs are represented by Public Counsel, Hogan Lovells LLP, and Bet Tzedek.
The class action lawsuit against Los Angeles County and Renovate America is Nemore et al. v. Renovate America et al. The class action lawsuit against Los Angeles County and Renew Financial is Ocana et al. v. Renew Financial et al. The class consists of all homeowners who entered into a Renew (operating the CalFirst program) or Renovate (operating the HERO program) PACE assessment contract with Los Angeles County between March 1, 2015, and March 31, 2018.
UPDATE: March 26, 2024 – Los Angeles County and Renew Financial Holdings have agreed to a $12 million settlement to pay homeowners for unaffordable PACE property liens. Under the settlement, anyone who entered into a Renew Financial (operating the CalFirst program) or Renovate America (operating the HERO program) in Los Angeles County between March 1, 2015, and March 31, 2018, qualifies if a lien was recorded against their property. For more info about the settlement, click here. To get informed when the official settlement claim form is ready, click here.
UPDATE: Settlement payments to class members who submitted valid claims are on hold because of an appeal. To find out if you submitted a valid claim, contact the Settlement Administrator. This page will be updated once the appeal is resolved.
Court
Superior Court of the State of California, County of Los Angeles
Status
Final approval of class action settlement granted by the Court, 01/10/25
(appellate proceedings pending related to motion to vacate and motion to intervene filed after final approval)
Case No.
BC701809 [Renew Financial], BC701810 [Renovate America]
Filed
04/12/2018
public counsel Legal Team
Our Co-Counsel
Case Developments
Filing
08/30/2024
Class Counsel Files Motion for Final Approval of Class Action Settlement and Awarding Attorneys’ Fees and Costs
Filing
12/18/2023
Plaintiffs File Motion for Preliminary Approval of Settlement
PLAINTIFFS’ motion for PRELIMINARY APPROVAL
DECLARATION OF STEPHANIE CARROLL IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL
DECLARATION OF MICHAEL M. MADDIGAN IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL
Update
11/07/2023
Los Angeles County Board of Supervisors Approves Settlement
LOS ANGELES COUNTY BOARD OF SUPERVISOR’S STATEMENT OF PROCEEDINGS (AGENDA ITEM 80)
Update
11/01/2021
Plaintiffs Settle Case with Renew Financial at Mediation
Update
12/21/2020
Renovate America Files for Bankruptcy
San Diego Union Tribune story here. “[Renovate America] has been the target of 56 lawsuits, including three proposed class actions, according to bankruptcy filings.”
Filing
08/07/2020
Plaintiffs File Second Amended Complaints
Filing
01/24/2019
Plaintiffs File First Amended Complaints
Filing
04/12/2018
Plaintiffs File Twin Class Action Lawsuits
A group of Los Angeles County homeowners filed twin class action lawsuits, alleging that Renovate America and Renew Financial have failed to implement basic consumer protections for their PACE financing products, burdening low- and moderate-income homeowners with home improvement loans that they cannot afford to repay. The lawsuit alleges that Los Angeles County is complicit in the failings of the PACE program, leaving thousands of low-income, elderly, and non-English fluent residents exposed to predatory lending practices. The Plaintiffs allege they were misled and financially harmed through their participation in the program.
Press Releases
Press Release
03/26/24
$12 Million Settlement Reached in Los Angeles Clean Energy Predatory Loan Case
Learn MorePress Release
05/19/20
Advocates Hail End Of Controversial Los Angeles County PACE Program
Learn MoreMedia
- Spectrum News 1, Deadline looms for eligible LA County homeowners to submit lawsuit claim, 6/13/24
- ABC7, L.A. homeowners who were misled by energy-efficient loan program may qualify for $12M PACE settlement, attorneys say, 3/29/24
- Daily Journal, LA County, lender settle PACE loan fraud case for $12M, 3/28/24
- Westside Current, $12M Settlement in LA’s Disputed Clean Energy Loan Clash, 3/28/24
- LA Times, L.A. County settles PACE loan lawsuits; affected homeowners to receive millions, 3/26/24
- Spectrum News 1, Homeowners affected by LA County’s PACE program to receive financial relief from $12 million dollar settlement, 3/26/24
- Telemundo 52, Dueños de casa ganan demanda contra compañías de paneles solares (Homeowners win lawsuit against solar panel companies), 3/26/24
- Univision, Acuerdo por $12 millones en demanda por préstamo abusivo para paneles solares en Los Ángeles ($12 Million Settlement in Los Angeles Solar Panel Abuse Loan Lawsuit), 3/26/24
- NBC4, LA County settles ‘PACE’ loan lawsuits, 3/26/24
- Spectrum News 1, Years after shutdown, homeowners still dealing with lingering issues from LA County’s PACE program, 10/25/23
- Last Week Tonight with John Oliver, John Oliver explains how PACE is fundamentally flawed, 6/20/21
- Bloomberg, The Subprime Solar Trap for Low-Income Homeowners, 4/6/21
- LA Times, Some homeowners struggled to pay PACE improvement loans. The coronavirus made it harder, 6/29/20
- Medium, Op-Ed: L.A. County Must Do More for Its PACE Victims, 5/28/20
- LA Times, L.A. County ends controversial PACE home improvement loan program, 5/21/20
- LA Times, A loan program was set up to boost energy efficiency. Instead, it’s being used to build ‘granny flats’, 2/17/19
- KCRW, Effort to make LA more eco-friendly means foreclosure for one homeowner, 9/17/19
- LA Times, Homeowners were defrauded through the PACE lending program, L.A.’s city attorney alleges, 4/4/19
- KCRW, When going green brings an unexpected financial burden, 3/5/19
- LA Times, PACE lender approved ‘potentially fraudulent loans,’ ex-employee alleges, 3/1/19
- LA Times, After booming for years, a controversial home improvement loan is on the decline, 12/21/18
- Daily Democrat, Seniors buying clean energy loans victimized, 12/10/18
- Courthouse News Service, Homeowners Call California Program a Magnet for Fraud, 10/24/18
- LA Daily News, Homeowners sue L.A. County, lenders over PACE loans, 4/25/18
- LA Times, Lawsuits filed against L.A. County, lenders over green energy program, 4/12/18
- Vice, I Tried to Make My Home Energy-Efficient and It’s Ruining My Life, 12/19/17
- LA Times, FHA to no longer insure new mortgages with PACE loans, 12/7/17
- LA Times, The FBI is reportedly looking into practices of largest lender of PACE home-improvement loans, 9/26/17
- LA Times, These loans were created to help homeowners, but for some they did the opposite, 6/4/17
- CBS2, Goldstein Investigation: How Going Green Might Have You Seeing Red In The End, 4/30/16
Settlement Information
UPDATE: April 28, 2025 — On March 4, 2025, the trial Court ruled on several motions filed by a class member who previously objected to the settlement and was unsuccessful. The Court’s order granting final approval of the Class Action Settlement is still valid. However, the Court granted the class member intervenor status, and on March 11, she filed an appeal.
Payments to class members who submitted valid claims remain on hold until the appeal is resolved.
We are doing everything we can to reach a final resolution as quickly as possible. Nevertheless, we cannot provide any time estimates for final resolution of the case and distribution of any payments at this time. Please check back for any updates.
UPDATE: January 22, 2025 — On January 10, 2025, the Court entered its Judgment and Order granting final approval of the Class Action Settlement.
Typically, the Settlement Administrator would now begin processing and distributing payments as stated in the Order. However, on January 21, a Motion to Vacate was filed by a non-party who previously objected to the settlement and was unsuccessful. As a result of the motion, payments to class members who submitted valid claims are on hold until the Court resolves this motion and the appeal period concludes.
We cannot provide any time estimates for final resolution of the case and distribution of any payments at this time. Please check back for any updates.
UPDATE: September 3, 2024 — On August 30, 2024, Class Counsel filed the Motion for Final Approval of Class Action Settlement and Awarding Attorneys’ Fees and Costs. You can find the Motion on the Case Developments and Key Developments section of our litigation webpage. As explained in the Motion, the Settlement Administrator received 5,623 timely claims and has determined that approximately 3,538 claims are valid. The Settlement Administrator has mailed postcards to the claimants whose claims were denied.
The Court is scheduled to hold a hearing on the Motion on September 24, 2024, at 9:00 a.m. At or after the hearing, the Court may grant final approval of the settlement or order Class Counsel to provide additional information or evidence before granting final approval. Assuming the Court grants final approval, the Settlement Administrator will begin issuing payments to, and on behalf of, the Class Members who submitted valid claims. Under the terms of the settlement agreement, the Settlement Administrator will pay Class Members in Level One directly. For Class Members in Levels Two, Three, and Four, the Settlement Administrator will make payment on behalf of the Class Member towards the Class Member’s existing PACE assessment(s), up to the amount of any existing PACE assessment, before remitting the remainder of any settlement amount for that Class Member directly to that Class Member.
We currently estimate that it will take at least 60 days after the Court’s final order before the Claims Administrator can begin to process payments.
UPDATE—August 2, 2024: The June 13, 2024, deadline to submit claims, objections, and exclusions has passed. The claims administrator is no longer accepting claims, objections, or exclusion requests. The claims administrator is in the process of validating and processing claims. If you submitted a claim or exclusion request and the administrator needs more information, you will receive a notice by mail. These notices began being mailed on August 1, 2024.
Once Class Counsel has all of the information needed a Motion for Final Settlement Approval will be submitted to the Court. Due to the high number of submissions, the parties agreed and the Court has approved an extension of time for the final approval Motion to be filed, which is now August 30, 2024. A hearing on the Motion is now set for September 24, 2024 at 9:00 a.m. The Court’s most recent order is available here.
SETTLEMENT OVERVIEW—March 26, 2024: If you entered into a Renew Financial (operating the CalFirst program) or Renovate America (operating the HERO program) PACE loan as part of the Los Angeles County program between March 1, 2015, and March 31, 2018, and had a lien recorded against your property, you may be qualified for compensation under the settlement in Ocana, et al. v. Renew Financial Holdings, Inc., et al.
The FAQ on the website is the best place to get information about the settlement and completing the claim form. The website is also available in Spanish: https://www.pacelasettlement.com/es
Class Members can contact the claims administrator at 1‑888‑825‑1218 or info@PACELASettlement.com with any questions or for assistance completing the claim form. It is the claims administrator’s job to help class members with the process.
