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50 CFPB PURSUES PACE FINANCING RULES e Consumer Financial Protection Bureau (CFPB) has issued an Advance Notice of Proposed Rulemaking (ANPR) on residential Property Assessed Clean Energy (PACE) Financing. e rule will address the direction given to the bureau on PACE financing under the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) that was signed into law in May 2018, CFPB said in a statement. "is action is the next step in the Bureau's efforts to implement the Economic Growth, Regulatory Relief and Consumer Protection Act as expeditiously as possible," said Kathleen L. Kraninger, Director, CFPB. "I look forward to reviewing the comments in response to the questions we are asking to facilitate the required rulemaking." rough the ANPR, the consumer watchdog is seeking information on written materials associated with PACE financing transactions, current standards and practices in PACE financing originations, civil liability under Truth in Lending Act (TILA) for violations of the Ability to Repay (ATR) requirements related to PACE financing as well as rescission and borrower delinquency and default, unique features of PACE, and potential implications of regulating PACE financing under TILA. According to the ANPR, PACE financing has been defined in the EGRRCPA as "financing to cover the costs of home improvements that result in a tax assessment on the real property of the consumer." e law also directs CFPB to prescribe regulations that achieve two purposes on PACE financing, the CFPB said. e first objective is to carry out the purpose of TILA's existing ATR requirements even for PACE financing. e existing ATR requirements prohibit creditors from making a residential mortgage loan unless they make a "reasonable and good faith determination" based on verified and documented information on the consumer's ability to repay that mortgage. e ATR requirement is "to assure that consumers are offered and receive residential mortgage loans on terms that reasonably reflect their ability to repay the loans and that are understandable and not unfair, deceptive, or abusive." e second objective, according to the CFPB relates to the regulations implementing EGRRCPA's section 307 must apply TILA's general civil liability provision for violations of the ATR rules that will apply to PACE financing. "at provision sets forth damages for TILA violations generally, as well as specific penalties for violations of the current ATR requirements." THE TRUTH BEHIND HOME FLIPPING ere's more to house flipping that meets the eye. And for professional home flippers, delays in project timelines, finding the right partners, and most importantly, funding, are just some of the business challenges, according to a survey by Porch. e survey of 370 people who have flipped residential real estate in the last five years looked at aspects such as buying a home, renovating on a budget, and quickly selling it for a profit. When it came to funding for a home flip, 41.6 percent respondents said that they took the capital from personal savings accumulated from their primary source of income. Around 30 percent took bank loans, while 6.2 percent said they borrowed money from a family or friend. In terms of capital needed for a median flip vis-a-vis the profit on it, the survey revealed that profits weren't rising with the trend. In fact, the median flipper "needed $50,000 for their most recent flip, because the average purchase cost was $100,000." It found that while renovations were the cheapest part of the project ($30,000 or less), respondents said that "underestimating the cost of renovating could be the difference between a large profit and losing money." Nearly 64 percent of respondents said that they underestimated the cost of their last project while 36 percent said they didn't budget enough money. Project partners also played an important role with 87 percent of the respondents saying that they flipped houses with a partner. Of these, 45.9 percent partnered with their significant other for these renovations. As with most big projects, major disagreements happening over budgeting (55.9 percent) and timelines (46 percent). However 43.5 percent respondents said that they rarely disagreed with their partners. Speaking of timelines, the survey found that on an average the total time to flip a house was delayed 17 days from the original timeline. Project management was the most stressful part of the business. Around 90 percent of the respondents reported this factor as their key area causing stress, followed by construction (85 percent).

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