Key facts
- Hometap is facing multiple lawsuits alleging violations of the Truth in Lending Act (TILA).
- Plaintiffs claim Hometap's home equity investment contracts are disguised mortgages designed to avoid federal and state lending laws.
- One lawsuit alleges Hometap advanced approximately $98,000 in exchange for a 10-year agreement tied to 13% of a home's appraised value without evaluating income or repayment ability.
- Plaintiffs in one suit claim they could owe Hometap up to twice the amount received, with annualized rates of return between 17.936% and 21.523%.
- The Massachusetts attorney general has also scrutinized Hometap's products as illegal, high-interest mortgages.
- Other home equity investment providers, such as Unison Agreement Corp., are facing similar allegations of deceptive practices.
Boston-based home equity investment (HEI) provider Hometap is facing a wave of lawsuits, including a recent class-action suit filed by Marlene Crawford, alleging the company has violated the Truth in Lending Act (TILA). Plaintiffs contend that Hometap improperly structured its HEI contracts as "Option Purchase Agreements" to circumvent federal and state mortgage lending laws and consumer protections, marketing them as "not a loan."
In one of the class actions, Hometap has argued that the dispute over TILA applicability should be resolved through arbitration, asserting that the arbitration agreement falls outside TILA's scope. However, plaintiffs counter that TILA prohibits mandatory arbitration clauses in residential mortgage agreements.
The litigation adds to existing scrutiny from the Massachusetts attorney general, who has previously alleged that Hometap's products are illegal, high-interest mortgages. National Mortgage News reported on four separate lawsuits filed against Hometap in 2026 alone.
One suit, filed by Ryan Billey and Keicha Greenidge, claims Hometap advanced approximately $98,000 without evaluating their income or ability to repay. They allege that settling the agreement within its 10-year term could require repayment of up to twice the amount received, with annualized rates of return capped between 17.936% and 21.523%. Another suit by Roberta and John Ruane alleges Hometap acted in bad faith and with intent to defraud, failing to disclose that HEI was a predatory high-interest loan. The Ruane suit indicates that exiting the agreement could cost them significantly more than their initial investment, with potential costs exceeding 132% of the original amount based on current home values, and potentially reaching 224% more at projected future appreciation.
These legal challenges echo similar scrutiny faced by other HEI providers, such as Unison Agreement Corp., which has also been accused of misleading borrowers and using equity-sharing contracts that function as unlicensed, high-interest mortgages disguised as investment partnerships. A Ninth Circuit Court of Appeals ruling in Olson v. Unison previously found the company's product operated as a reverse mortgage with deceptive marketing practices, though the matter was later settled.