Renovate America Inc., which lends homeowners money to make “green” improvements such as adding solar panels or energy-efficient windows, filed for bankruptcy as litigation and the COVID-19 pandemic eroded revenue, Bloomberg News reported. Renovate’s lending was part of a government-backed program that lets people finance their loans by adding the payments to their property taxes. But consumer advocates and federal regulators have criticized them as expensive and susceptible to abuse. At least 56 legal cases are pending against San Diego-based Renovate, according to a chapter 11 filing on Monday. More than 115,000 loans were handed out by Renovate, according to its website. But revenue plummeted 81 percent between 2016 and last year after new legislation in California established tougher “ability-to-pay” standards for lending, according to a declaration filed by Chief Executive Officer Shawn Stone. Lawsuits have cost about $15 million since the beginning of 2018, Stone wrote. The COVID-19 pandemic provided the final push into bankruptcy, with financing volume dropping 47 percent in the first 10 months of 2020 compared with the previous year.
