Climate Change Call to Action: Duty to Serve our Communities and Market Stakeholders

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Climate Change Blog 2 2-17

The climate change definition is a very loose and often ambiguous term that confuses many people.  Climate change polarized conversations have been debated for centuries. On the one hand, it covers pretty much any earth related catastrophe and/ or unusual inclement weather patterns; and the other hand it could translate to atmospheric conditions such as higher temperature patterns. What it doesn’t cover or include in transparent terms is the economic and health benefits that energy reduction represents.

In a recent article, New York Times News published Tackling Climate Change without Saying Climate Change, a farmer in the north central Kansas heartland talks about how climate change has impacted farmers and their need to adapt. They don’t call it climate change, they call it a reality of dealing and adapting to their changing environment.

Even Bill Gates and T. Boone Pickens weighed in recently describing the need to innovate and continue a parallel track with oil production and clean energy technology.  Pickens recommended President Trump and Secretary Rick Perry pursue an energy plan in two parts 1) don’t screw up what we have going for us; and 2) don’t settle for what we’ve done so far.   

Regardless of what he Federal government chooses to do with climate change; the ship has sailed for most states. Many states are prepared to challenge the Trump administration regarding rolling back any state environmental or building code regulations.  

Government incentives for green building have been helpful in supporting energy and renewable equipment adoption short term – but they aren’t meant to prop up the economy and industries long term. And since when has the US federal government stopped consumer demand?  

As consumers continue to drive demand and the prices and technology continue to evolve a fast clip, the high-performance building industry should prevail.  Again, it is simply a supply and demand thing that has always worked in America. We are the ones we have been waiting for.  

With more construction and private-investor label loans coming available on the market today, it’s become easier to renovate and/or build new construction.  Green Energy Money offers resources and basic information about construction loans for green building. For more information on niche products, Fannie Mae Homestyle loan offers borrowers a way to renovate, adding green measures and square footage in one loan and closing.   

FHA (lender guidelines) and Fannie Mae offer a one-time construction loan product, (the product is suspended due to CFPB regulatory hiccups after TRID was implemented-relaunch expected 1st Q 2017) is proving to be in demand as rates go up. These loans allow homeowners to lock their rate during construction period – one loan, one closing.  

So where does the duty to serve fit into this story?  As evidenced by the Consumer Finance Protection Agency (CFPB) has suspended these programs since October 2015; the challenge being document disclosures, i.e., good faith estimates, compliance, and closing documents and the loans and universally meeting state lending requirements.  Seriously, the lending industry has been battling these issues, unable to deliver an economically viable loan product to consumers that would improve their financial and qualifying situation; and lower their risk of rising rates during construction timelines.  

Financial organizations and governments should demonstrate a duty to serve our communities with loan programs and guidelines that meet the 21st century-and save consumers money.  The Federal Housing Finance Authority (FHFA-love those acronyms!) issued a release in 2016 regarding their duty to serve underserved markets, i.e., low income housing.  However, this can also be interpreted and related to the green building-lending sector as well.   

Shouldn’t the lending industry and their governing regulators have a duty to serve homeowners and stakeholders by offering incentivized loan products or green mortgages?  Wouldn’t these communities represent a better economic opportunity for investors as well as homeowners?  Rocky Mountain Institute (RMI) published a Finance the Future Action Resource on exactly this subject.  The recommendations were submitted to the FFHA under their public comment period; no issuance of guidance from them has been received thus far.  

The bottom line to the story; the infrastructure, technology, qualified work force and demand is here; consumer engagement is here; the economics are here; what will it take for the lending community to finally embrace and support this emerging market? It takes one person and one building, community at a time, and people like us to start demanding financial market support!