Los Angeles County has agreed to a $12-million settlement to resolve allegations that its home improvement lending program wrecked the finances of many borrowers and left them vulnerable to foreclosure.

The settlement, granted preliminary approval Monday by an L.A. County Superior Court judge, comes six years after some homeowners sued the county in twin suits alleging that local officials knew, or should have known, the program would harm vulnerable homeowners and then looked the other way as problems piled up.

The county did not admit wrongdoing as part of the settlement and continued to deny the allegations. It said it settled to avoid further litigation costs.

"Without this, I think people would stand to get absolutely nothing," said Stephanie Carroll, an attorney with Public Counsel, which along with Bet Tzedek and Hogan Lovells represented homeowners in the two lawsuits. "Now they stand to get some compensation for what happened to them."

Launched in 2015, the county's Property Assessed Clean Energy, or PACE, program had the stated goal of enabling homeowners to finance energy- and water-efficient home improvements, including solar panels and low-flow toilets.

The program, a public-private partnership, was overseen by the county but largely operated and funded by private finance companies, which in turn relied on home improvement contractors to sign up borrowers.

Other PACE programs have been set up across the country. The loans require government approval because they are repaid as a line item on a homeowner's property tax bill.

PACE programs, including L.A. County's, have been dogged by allegations that consumers — particularly elderly and non-English-speaking homeowners — didn't understand what they were getting into and couldn't afford their loans, which, if unpaid, could lead to foreclosure.

Initially, lenders handed out loans based on the amount of equity a homeowner had in their property and didn't consider the borrower's income to determine if they could repay the loan.

Contractors who signed borrowers up for the loans have been accused of misleading consumers on how they would work.

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