You wouldn’t think it would be hard to talk people into an investment with 10–20% rate of return, right?

Nonetheless, nice post.

Best,

D

PEOPLE NEAR FORECLOSURE ARE NOT CREDITWORTHY

in giant red block lettering.

The proposal might need to be a bit more nuanced in actual implementation than what the transition brief seems to be saying (I could be misinterpreting it of course; feel free to correct my interpretation).

It seems like a building that’s, say, 29% below code would get the same interest rate as a building that’s, say, 50% above code if it reaches 30% below code. While I wouldn’t exactly want to reward an owner for starting with a really inefficient house, I’d think the energy efficiency gain from
-29% to -30% shouldn’t deserve a mortgage bailout. Some sort of scaling might be in order.

Similarly, it seems like an existing mortgage of, say, 15% interest rate would get the same bailout rate of 4.5% (in the 30% below code scenario) as an existing mortgage interest rate of 4.6%. Maybe the form of bailout should be in % reduction from the existing mortgage rate rather than an absolute rate.

I’m curious how the auditing of home energy efficiency percentages would work. This seems like it could be a big overhead sort of expense.

I’d be a lot more interested in some sort of improved rebate for deploying home energy efficiency, simply because I don’t like being in debt so loan help isn’t attractive. I suspect there are a lot of people out there with a similar attitude, and they probably tend to be in a good position to fund energy efficiency upgrades if the incentives are put in place to make them want to do so. I understand the desire to target the at-risk mortgages right now, but I wouldn’t overlook this other route.

I also wouldn’t overlook the other big elephant in the economic and energy efficiency room besides housing – the automobile sector. Similar to still-expensive houses, with all of the bailout news, I’m surprised how much money the U.S auto dealers are still asking for fuel-efficient cars, if so many are just sitting on lots rusting. Maybe a loan approach similar to the one described here for housing (and/or massive rebates to attract loan-averse people) would work for fuel-efficient cars (perhaps only if built in the U.S. and/or made by U.S. companies)?

this isn’t a foreclosure cure!

1. homes that were over-valued still have more to drop.

2. insolvent businesses (and governments and individuals) have more not less trouble to come.

3. this means people’s debts are bigger than their assets’ underlying value or than their ability to pay.

4. which means, millions of building owners are not credit-worthy.

5. which means until their loans are refinanced, written down, or forgiven, people near foreclosure are not creditworthy. no sane bank would lend to them.

energy savings to pay for a loan don’t mean a lick if the house is suddenly empty, cold, and dark.

so while this is probably a good medium-term stimulus and builds the economy, giving people hope and things to rely on, “more loans to the rescue” is nature’s way of telling you the author doesn’t understand our situation.

Joe, another great article…until i watched the UC Berkeley presentationns for Rosenfield,,,i had no clue how much opportunity there was in making building more energy efficient…What was the number, close to 50% of coal plant’s output goes to buildings? Anyway, this plan seems like a win-win-win…I keep thinking how could this be perverted.