Key facts
- Unison is accused of trapping homeowners in predatory mortgages through high-cost, nonrecourse loans disguised as contracts.
- Plaintiffs allege Unison systematically misrepresents its product, its relationship with homeowners, and the substantial costs involved.
- The lawsuit claims Unison violated North Carolina's high-cost home loan statute, which prohibits balloon payments, negative amortization, and lending without proof of repayment ability.
- Unison is accused of deducting fees from upfront payments and collecting a percentage of the home's future value upon agreement termination.
- The case questions whether home equity sharing agreements are actually mortgages, which could bring the HEI industry under mortgage regulatory oversight if judges side with plaintiffs.
A federal lawsuit filed last week in North Carolina accuses home equity investment (HEI) company Unison of trapping homeowners in predatory mortgages. The complaint alleges that Unison’s agreements are high-cost, nonrecourse mortgage loans disguised in confusing contracts to evade state lending laws. Plaintiffs Lara Petty, Thomas and Leslie Shiel, and Nikolas and Diana Moriates claim they ended up owing Unison significantly more than they received.
The Moriates, for instance, received a net advance of approximately $61,000, but Unison now estimates they could owe nearly $270,000 to exit the agreement. The lawsuit asserts that Unison violated North Carolina’s high-cost home loan statute by including features like balloon payments and negative amortization, and by lending without verifying the borrower's ability to repay. The complaint states Unison attempts to bypass these safeguards by labeling its product an 'option' contract instead of a loan.
Further allegations include that Unison was not licensed to make mortgages in North Carolina and failed to provide required lending disclosures. The suit references a 2025 Ninth Circuit Court of Appeals ruling, Olson v. Unison Agreement Corp., which determined Unison's product functioned as a reverse mortgage despite the company's 'option contract' designation. The complaint details Unison's practice of deducting fees from upfront payments, recording a deed of trust, and collecting a percentage of the home's future value, often 50% or more, upon agreement conclusion. Petty, for example, alleges Unison deducted over $4,500 in fees from an initial $69,750 payment.
The home equity investment industry has faced increasing regulatory and legal scrutiny nationwide, with similar class actions filed in California and Colorado, and a suit by a consumer advocacy group in the District of Columbia. The North Carolina case is considered significant as it tests whether home equity sharing agreements are indeed mortgages, a question still being debated in courts. If judges rule in favor of the plaintiffs, it could subject the entire HEI industry to mortgage regulatory frameworks.