A federal lawsuit alleges that a provider of Property Assessed Clean Energy loans has been misleading homeowners about the transferability of the lien.

The complaint, filed in U.S. District Court for the Northern District of California, alleges that consumers are told the liens can be transferred when the property is sold.

But in reality, according to the lawsuit, PACE liens must be paid when a home is sold because most mortgage programs don’t allow a PACE lien.

Source: Mortgage Daily