Greening Your Mortgage: Energy Efficient Mortgages (EEMs)

With all of the recent gloom and doom mortgage news in America, I was surprised to hear soft murmurs about a dim light on the horizon.  Green mortgages, or energy efficient mortgages.

My journey to find the mythical green mortgage was not an easy one.  My fingers ached from repeated online searches and from dialing far too many phone numbers.  Truthfully, today it is tough to know which banks are in business, which banks have merged with each other and which banks have decided to suspend their mortgage programs.  My personal mortgage has been sold countless times over the past three years and even paying the bill can be tricky because it is tough to know just what company I should be writing the check out to each month.

First, I began my journey by contacting mortgage brokerage firms.  Larger banking corporations filter their products down through brokers, so generally mortgage brokers are the last to receive a new product.  Still, they are able to provide competitive products from a number of banks.  The mortgage brokers I spoke with had heard of green and energy efficient mortgages, but had yet to see one.

Next, I moved on to small baking chains.  Susan, A Senior Vice President from a small community banking chain told me that, “banks are not producing new products.  We are just trying to tread water.” She then added that “green mortgages may be a great product for homeowners in the future when banks can be more competitive again.”

Finally, I moved on to the big guys.  Bank of America is known within banking circles to be a progressive frontrunner that has big resources.  That reputation seems to be true when exploring green mortgages.

Terry Francisco of Bank of America was happy to talk about his company’s new green mortgage product with me.  The bank is offering $1000 towards closing costs for buyers who outfit their homes with energy star appliances.  Terry likens the $1000 to making-up costs from upgrades to energy efficiency.  “Helps homeowners who blink when they see a higher price tag,” said Terry.

As for just how many homeowners have taken advantage of the $1000 rebate towards closing costs, Terry said, “The mortgage market has been so impacted that it hasn’t reached our expectations.”

When (cross fingers and knock on wood) the market makes a turn for the better, it will be interesting to see how banks will compete for the mortgages of energy efficient home owners.

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