John Oliver Decries Predatory Government Home Improvement Loans

After lightly roasting Russian President Vladimir Putin on his Geneva Summit press conference, Last Week…

After lightly roasting Russian President Vladimir Putin on his Geneva Summit press conference, Last Week Tonight host John Oliver focused his attention on Japan’s efforts to keep the 2020 Olympics on schedule next month despite criticism from many of its citizens.

The country has reached a national vaccination rate of just 6%, a number, Oliver said, that “should be higher than the number of entries in The Fast And The Furious franchise” in order to host the Olympics.

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Though the country has already spent $15.4 billion, with government audits suggesting the number could be significantly higher, the decision to stop the Olympics is not entirely up to Japan. The power to scrap the Games, apparently, belongs solely to the International Olympics Committee.

“It would be like if your child got the flu and you tried to reschedule their birthday party, only to get overruled by the clown you hired,” Oliver quipped.

Oliver took some time to remind viewers hosting the Olympics is never a good idea for any city.

“While I truly hope for everyone’s benefit that this works out you can’t help feeling the main motivator in this event taking place is money. Will it be worth it?” Oliver asked.

After a quick montage from this year’s Westminster Dog Show, Oliver segued to his main segment of the episode: PACE financing.

PACE financing, which stands for Property Assessed Clean Energy financing, is a program used in several states that aids low-income families renovate their homes for energy efficiency improvements. PACE, which is on its way to states such as New York and Ohio, was introduced in 2008 by President Obama to soften the financial burden of upgrading one’s home.

Oliver took some time here to emphasize any viewers born after 1985 should immediately stop watching the episode since they’ll never own a home due to a myriad of economic conditions.

“If you’re under 35, you can skip this story. Go fight with a 15-year-old on TikTok about the coolest way to part your hair. Life is sad and that’s okay,” Oliver remarked.

PACE financing works by covering all the upfront hard and soft costs of a home renovation. PACE costs are then repaid on the homeowner’s property tax bill over a period of up to 30 years. The logic is the energy cost savings over that period will eventually offset the tax increases. In a sense, the renovation pays for itself.

Oliver said though government program is well-intentioned, the likes of private companies have ruined its efforts, leading to people losing their homes. “When PACE loans go wrong, they go very wrong,” a serious Oliver intoned.

A news clip played about how a Bay Area homeowner got taken advantage of by a PACE-funded contractor who continually suggested new home improvements. The homeowner said his mortgage payment went up $600 and started considering homelessness.

He noted red flags in the details of the PACE program, such as the fact that contractors – who are responsible for the planning and building – also organize financing.

“Think about what that means for a moment,” Oliver said. “The people with responsibility of pitching a very complicated financial product – a pseudo-loan that’s technically a tax lien – are contractors whose training is not in finance. No judgment here. People are trained for different things. It’s the same reason you don’t ask a banker to re-grout your bathroom tiles. They’re going to make a mess!”

PACE contractors also have a history of targeting low-income and minority zones. Oliver continued, “It doesn’t stop there because contractors have also been accused of targeting neighborhoods of non-English speakers, senior citizens, and even those with intellectual disabilities.”

Another deficiency of PACE financing is its use of misleading representatives. Oliver noted in many cases, PACE contractors travel door-to-door, spouting the benefits of this renovation program using an iPad, which can be used to expedite instant sign-ups.

“This isn’t like agreeing to the terms and conditions of an iTunes update. This is like sitting across the table from a banker, potentially signing your house away,” Oliver said.

Oliver discussed that big financial players have taken note of PACE’s problems. Financial lending giants Freddie Mac and Fanny Mae have stopped backing PACE-funded homes. When these homes accrue debts that can’t be paid, Oliver said that it’s tax collectors who pick up the debt and foreclose on homes.

The most poignant quote came from a passionate St. Louis tax collector who begged his county to get rid of the county’s PACE program.

“The more of these you have, some percentage of the people will lose their houses. You can make consumer protection better and more rigorous, but at the end of the day some people will have their homes taken from them,” the Missourian said.

“Exactly. Nobody in this country should be losing their home because of an air conditioner. They should be losing their home because of unexpected medical bills – like an American!” a sarcastic Oliver commented.

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