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Loan defaults in a popular program meant to finance energy-saving home upgrades have increased substantially, despite lenders’ claims that few borrowers have missed payments, the Wall Street Journal reported today. The small, high-interest-rate loans were made as part of the Property Assessed Clean Energy program (PACE), a nationwide initiative designed to help people afford solar panels, energy-efficient air-conditioners and other “green” appliances. PACE loans are among the fastest-growing types of loans in the U.S. Private lenders in the PACE program have told Wall Street investors, as well as local and federal government officials, that borrower defaults are rare and that no homeowners have gone into foreclosure as a result of the program, according to investors and public officials. But a Wall Street Journal analysis of tax data in 40 counties in California — by far the biggest market for PACE loans — shows that defaults have jumped over the last year. Roughly 1,100 borrowers have missed two consecutive payments this year through the tax year that ended June 30, compared with 245 over the previous year. That means they are in default, and could potentially have their homes auctioned off by local governments within five years.

Ten years ago, Fumiko Chino was the art director at a television production company in Houston, engaged to be married to a young Ph.D. candidate. But today she's a radiation oncologist at Duke University, studying the effects of financial strain on cancer patients, and a widow, according to an NPR feature yesterday. In 2005, Chino's husband was diagnosed with neuroendocrine carcinoma, an aggressive cancer of endocrine cells that can strike in a variety of places in the body and can be hard to treat. Soon, his medical costs surpassed his insurance policy's $500,000 lifetime limit, but the bills kept coming. Ten years after Ladd's death, Chino is still dealing with the aftereffects. "I still owe the debt," she says. "I stopped answering phone calls from debt collectors." Chino is co-author of a research letter, published yesterday in JAMA Oncology, that shows that some cancer patients, even with insurance, spend about a third of their household income on out-of-pocket health care costs outside of insurance premiums. The JAMA Oncology study shows that on average, cancer patients spend about 11 percent of their income on out-of-pocket health care costs, not including insurance premiums.

Advocates for the elderly persuaded federal housing officials two years ago to offer more rights and protections to the spouse of a borrower who takes out a reverse mortgage and later dies. Now there is concern that a small wording change in the Trump administration’s proposed budget request for the Department of Housing and Urban Development could undo some of those protections — potentially increasing the chances that a surviving spouse who did not sign the mortgage documents could lose a home in a foreclosure, the New York Times reported today. Two United State senators sent a joint letter to Ben Carson, the secretary of HUD and Mick Mulvaney, director of the Office of Management and the Budget two months ago, seeking clarity on the proposed wording in the budget request. Sens. Marco Rubio (R-Fla.) and Catherine Cortez Masto (D-Nev.) asked whether the agency was seeking to reverse the earlier policy change.

U.S. consumer credit card debt just passed an ominous milestone, beating a record set just before the global financial system almost collapsed in 2008, Bloomberg News reported. Outstanding card loans reached $1.02 trillion in June, data from the Federal Reserve show, as lenders including Citigroup Inc. and JPMorgan Chase & Co. compete to sign up cardholders who may carry balances — a relatively lucrative business in a prolonged period of low interest rates. Investors have been skittish over the potential for defaults to rise ever since card balances eclipsed $1 trillion in February. Credit card issuers Capital One Financial Corp., Synchrony Financial and Discover Financial Services said write-off rates ticked up in the second quarter from the previous three months.

Student loan giant Navient Corp. has suffered a pair of courtroom defeats in its attempt to block government lawsuits alleging the nation’s largest student debt company mistreated borrowers, Bloomberg News reported today. The losses come in a trio of lawsuits filed in January by the U.S. Consumer Financial Protection Bureau and state attorneys general of Washington and Illinois. They collectively allege Navient mistreated hundreds of thousands of student debtors by taking shortcuts to minimize its own costs, while adding what the CFPB said was as much as $4 billion in interest charges to borrower loan balances. Navient illegally steered struggling borrowers facing long-term hardship into payment plans that temporarily postponed bills (while interest continued to accrue), the officials alleged, rather than helping them enroll in federal programs that cap payments relative to their earnings and offer the promise of loan forgiveness. Navient has denied the allegations. On Friday, U.S. District Judge Robert D. Mariani in Scranton, Pennsylvania, denied Navient’s motion to dismiss the CFPB lawsuit. Mariani wrote in his ruling that Navient’s argument that its activities complied with the Higher Education Act, Department of Education regulations, and its loan servicing contract with the Education department didn’t relieve the company of its obligation to not commit unfair, deceptive, or abusive acts in violation of the Consumer Financial Protection Act.

Credit card losses are mounting, a reversal from a six-year trend that could be a warning sign for markets and the broader economy, the Wall Street Journal reported today. The average net charge-off rate for large U.S. card issuers — the percentage of outstanding debt that issuers write off as a loss — increased to 3.29 percent in the second quarter, its highest level in four years, according to Fitch Ratings. The quarter was also the fifth consecutive period of year-over-year increases in the closely watched rate. All eight large issuers, including JPMorgan Chase & Co., Citigroup Inc., Capital One Financial Corp. and Discover Financial Services had increases for the quarter. While losses are rising, they remain low compared with historical levels and the 10% net charge-off rate they hit in early 2010. Lenders say they aren’t expecting a return to crisis-level losses and the increases are largely a return to normal after a period of abnormal lows.

The developer of an enormous Ute Avenue mansion that at one time was the most expensive home on the market in Colorado is being sued by a lender who has foreclosed on the residence, which is now in receivership, Aspen Daily News reported today. Aspen developer Leathem Stearn contends a Pitkin County judge’s receivership order for the nearly 19,000-square-foot home was improper and has filed for federal bankruptcy to try to hang onto it. Built in 2011, the mansion drew media attention for its numerous amenities, including a lazy susan for vehicles in the five-car garage, a two-lane bowling alley, 40-foot ceilings and a floating staircase, a 30-foot rock-water wall and an indoor saline pool and hot tub. It also has seven bedrooms and 11 bathrooms, along with ski-in access from the nearby Ajax Trail. Stearn told CNBC in 2013 that it was a “lifestyle compound.” It was initially listed for $45 million before the price was reduced to $39.7 million. The home has never sold, according to Pitkin County Assessor records. Stearn sued Dutch businessman Paul J.A. van Hessen, the holder of $16.8 million in loans, in May, alleging that van Hessen is falsely claiming ownership of the home. Stearn also alleges the lender has fouled efforts to market and sell the home, and develop an adjacent house and common elements the residences would share. Van Hessen sued Stearn in June, saying that the developer has failed repeatedly to pay back the loans. Judge Chris Seldin of Pitkin County District Court in June ruled in van Hessen’s favor, putting the property into receivership. However, ownership of the property is not settled. The case has been removed from Pitkin County District Court and is now in the hands of a federal judge after Stearn filed for chapter 11. It was the second time since 2010 that Stearn has filed for bankruptcy. To fund the development, Stearn received loans from various entities, court filings show.

More than 37 percent of California households have so little cash saved that they couldn’t live at the poverty level for even three months if they lost a job or suffered another significant loss of income, the Pasadena Star-News reported yesterday. That’s the grim assessment of the 2017 Prosperity Now Scorecard. The report was compiled by Prosperity Now, a Washington, D.C.-based organization seeking to help people — particularly people of color and those with limited income — achieve financial security and prosperity. The scorecard also shows that 46 percent of households in California didn’t set aside any savings for emergencies over the past year, a higher percentage than the national rate of 43.7 percent. It doesn’t help that 21.1 percent of California jobs are in low-wage occupations. The scorecard found that 21.4 percent of Californians experienced income volatility over the past year, a situation that most often results from irregular job schedules. The report finds that nearly 20 million U.S. households (16.9 percent of the total) have zero or negative net worth. That means they owe more than they own. The scorecard suggests several policies that could help get struggling households on track.

A four-month high in U.S. consumer confidence reflects Americans’ sunnier views on both their current situation and outlook, a positive sign for the economy, data from the New York-based Conference Board showed and Bloomberg reported yesterday. With unemployment near a 16-year low and U.S. stocks reaching record highs, consumers remain upbeat, which should continue to support the household spending that accounts for about 70 percent of U.S. gross domestic product. Even so, the post-election surge in sentiment has yet to translate into a similar economic boost. Faster wage gains and improved prospects for fiscal stimulus could propel confidence further in coming months. The Conference Board’s data contrast with surveys from the University of Michigan and Bloomberg Consumer Comfort Index showing sentiment ebbing in recent weeks.