WRCOG to defer residential PACE foreclosures; authorizes judicial foreclosures for delinquent commercial properties

Casey Daley, WRCOG staff, presented the annual review of PACE delinquencies and urged the committee to authorize judicial foreclosure for a subset of delinquent commercial PACE properties. Daley explained that under WRCOG's indentures and the 1911 Bond Act, WRCOG may initiate judicial foreclosure on properties with delinquent assessments; he reported the program levied a little over 16,000 residential parcels and about 84 commercial parcels for 2025–26.

Daley said WRCOG was able to partner again with First National Assets (FNA) to purchase residential receivables, which lets WRCOG defer judicial foreclosures on residential parcels because funds are on hand to make bond payments. “By having those funds on hand, WRCOG is able to make the payments to the bond owners in full and on time, and therefore, we will be requesting you all to defer judicial foreclosure proceedings on all of the residential properties,” he said.

However, Daley reported staff was unable to secure a purchaser for commercial delinquencies this year. He described one commercial project (a proposed Temecula boutique hotel) that went into tax sale and yielded incomplete recovery for FNA, prompting FNA to pause commercial purchases. Daley warned that WRCOG must now authorize initiation of judicial foreclosure proceedings on delinquent commercial properties, while noting counsel expects many matters will be resolved before full foreclosure given banks’ involvement.

Committee members asked about typical outcomes when foreclosures are commenced; Daley replied the process usually begins with demand letters and multiple steps before actual foreclosure. The committee then voted to authorize initiating judicial foreclosure on delinquent commercial PACE properties and to defer residential foreclosures, and the motion passed by roll call.