Homeowners got cash with ‘no interest.’ Lawsuit says the real cost was their home equity
A new class-action lawsuit accuses Unison of disguising high-cost mortgage loans as “home equity investments” with no interest or monthly payments.
A financial product that promises homeowners cash without monthly payments or interest is facing a growing legal challenge over what consumers ultimately have to give up in return.
The National Consumer Law Center and law firm Singleton Schreiber have filed a proposed class-action lawsuit against Unison Agreement Corp. and affiliated companies, alleging that Unison marketed what were effectively high-cost mortgage loans as something entirely different: “shared equity” investments or option contracts.
The suit, filed in U.S. District Court in Massachusetts, argues that the distinction allowed Unison to avoid consumer protections that normally apply to mortgages, reverse mortgages and other forms of home-secured credit. The allegations have not been proven, and Unison has not yet publicly responded to the Massachusetts case.
Unison continues to advertise its equity-sharing product as providing cash with “no monthly payments” and “no interest.” Under the agreement, however, homeowners eventually repay the original amount plus or minus a share of the change in the home's value, generally when the property is sold, refinanced or the agreement ends, the suit alleges.
That structure can produce a very large bill if the house appreciates.
The Editors
$36,000 in cash, potentially $241,000 to get out
The Massachusetts lawsuit centers on homeowners Anne Cuvellier and David Hills.
Cuvellier, a 68-year-old social worker in East Longmeadow, received an initial Unison advance of $57,137, according to the complaint. After more than $20,000 was deducted for fees and required debt payments, she allegedly received about $36,329 in usable cash.
In return, the lawsuit says, Unison obtained an interest equivalent to 70% of her home's equity under the agreement.
By Sept. 30, 2025, Unison estimated that the amount needed to settle the agreement could reach $241,651, according to the complaint.
Hills, a semi-retired Hyannis homeowner who has lived in his family home for more than 50 years, allegedly received a net advance of about $61,851. His agreement also gave Unison a 70% interest under the contract, the lawsuit says.
Unison later estimated that Hills could owe somewhere between $236,301 and $331,103, according to the complaint.
The lawsuit alleges that those outcomes illustrate the fundamental problem with marketing the transactions as something other than loans.
The proposed class includes Massachusetts residents who entered into Unison Homeowner Agreements and alleges violations of the state's consumer protection, credit disclosure, mortgage lending and reverse-mortgage laws.
The appeal of ‘no monthly payments’
Home-equity sharing agreements have grown partly because they solve a real problem.
Millions of homeowners have accumulated substantial equity but may not have enough income or credit to qualify for a conventional home-equity loan or HELOC — or may simply not want another monthly payment.
A home-equity agreement gives the homeowner cash today. Instead of making monthly payments, the homeowner promises the company a future payment tied partly to the home's value.
For someone who is “house rich and cash poor,” that can sound attractive.
But the Consumer Financial Protection Bureau warned in a detailed market study that the eventual repayment can reach hundreds of thousands of dollars and may be difficult for consumers to predict when they sign the contract.
The CFPB found that home-equity contracts typically must be settled in one large payment after 10 to 30 years or when another event occurs, such as the sale of the home.
Consumers have complained about unexpectedly large payoff amounts, appraisal disputes, difficulty refinancing conventional mortgages and situations in which selling the house appeared to be the only practical way to get out of the agreement.
‘No interest’ doesn't necessarily mean not expensive
The language surrounding the products can also make them difficult to compare with conventional loans.
If a bank lends a homeowner $50,000 at 8%, the borrower can readily calculate the interest rate and monthly payment.
An equity-sharing contract may instead take a percentage of future appreciation, sometimes after adjusting the home's initial value or applying a contractual multiplier.
The CFPB found that because of those features, the implied cost of some home-equity contracts can rise by as much as roughly 22% annually during the early years of an agreement.
In one example analyzed by the agency, a homeowner who received $50,000 could owe between about $94,000 and $216,000 after 10 years, depending on what happened to the home's value.
That doesn't mean every home-equity agreement will cost more than a loan. If a home's value falls, the homeowner's eventual payment can also decline.
Unison itself says whether its agreement is more or less expensive than traditional borrowing depends on changes in the home's value.
The difficulty is knowing the cost in advance.
Courts are beginning to ask whether these are really loans
The Massachusetts case is not occurring in isolation.
Unison has faced similar litigation in several states, including California, Colorado, New York and Washington.
One of the most consequential decisions so far came from the U.S. Court of Appeals for the Ninth Circuit.
In an August 2025 case involving Washington homeowners, the appeals court rejected a lower court's dismissal of claims against Unison.
The court examined the economic substance of Unison's agreement rather than simply the label attached to it and concluded that the particular arrangement amounted to a reverse mortgage loan under Washington law.
The judges noted that homeowners could remove Unison's lien without selling their home only by paying back the original advance plus potentially a substantial share of appreciation.
The court also allowed claims to proceed alleging that marketing the transaction as involving no “loan,” “debt” or “interest” could deceive consumers.
The ruling does not automatically determine how Massachusetts law will apply to Unison's agreements, but it could give plaintiffs in other states an important legal roadmap: courts may examine what these transactions actually do rather than what companies call them.
A small market that could become much bigger
Home-equity sharing remains relatively small compared with conventional mortgage lending, but it has been growing quickly.
The CFPB estimated the market at roughly $2 billion to $3 billion and found that the four largest companies had originated more than 37,000 contracts.
During the first 10 months of 2024 alone, the four largest companies securitized about $1.1 billion in home-equity contracts covering roughly 11,000 homes, according to the Consumer Financial Protection Bureau.
Unison says it has helped more than 17,000 homeowners unlock more than $1 billion in home wealth.
That growth makes the legal question increasingly important.
If courts ultimately decide that these transactions are loans or reverse mortgages, companies offering them could become subject to licensing, disclosure, counseling, interest-rate and other consumer-protection requirements that they have historically argued do not apply.
What homeowners should know
Consumers considering a home-equity sharing agreement should focus less on the absence of a monthly payment and more on the possible cost of leaving the agreement.
Before signing, calculate several scenarios for what the company would receive if your home appreciates 3%, 5% or 8% annually.
Also ask what happens if you want to refinance, move, divorce, transfer the home to children or simply buy the company out while continuing to live there.
Most importantly, compare the agreement's potential payoff with a HELOC, home-equity loan, cash-out refinance or — for homeowners 62 and older — a federally insured reverse mortgage.
Those alternatives can have drawbacks of their own.
But unlike an agreement whose ultimate price depends on a home's value years into the future, conventional loans generally make the cost of borrowing much easier to see.
And that is increasingly the issue at the center of the lawsuits against Unison: whether calling a financial transaction an “investment” changes what it really is.
