LOS ANGELES -- It wasn't until the work was done that Marcelino and Josefina Rodriguez said they learned the truth.
They had been signed up for a roughly $45,000 PACE home improvement loan at nearly 10% interest -- even though they said a woman working with the contractor told them their new roof and water heater would be free through a government program.
The Rodriguezes contacted the authorities, but the nearly $4,500 annual bill came due anyway -- a financial hit for the household of four who scraped by on less than $30,000 each year as garment workers paid by the piece.
If they didn't pay, Marcelino, 67, and Josefina, 64, could lose the home they've owned since 2001, one that provided them and their sons stability after years of bouncing from rental to rental. So to get by, they started selling food and one of their sons said he exhausted his savings.
It was working -- until the coronavirus slashed their incomes.
"I don't know how we are going to pay," Marcelino Rodriguez said in Spanish through a translator. To lose the house "would destroy me."
As the economy struggles to recover from coronavirus-induced damage, consumer groups are raising concerns of a coming foreclosure wave stemming from PACE home improvement loans.
For years, the industry has been dogged by allegations that some home improvement contractors exploit a loan approval process with weak safeguards to mislead people into financing they can't afford, by telling them either that work would be free or that it would be less than it ultimately cost.
Consumer attorneys say they were seeing PACE-driven foreclosures even before the current crisis and now fear a surge as the recession cuts off economic lifelines for people already living on the edge.
"Our clients, who were barely holding on financially, are now falling off a cliff," said Stephanie Carroll, an attorney with Public Counsel, which is representing the Rodriguezes.