Home equity investment laws, enforcement, and court cases

Maine regulates shared appreciation agreements (LD 1901, Public Law 2025, chapter 653)

An emergency law, effective when signed, that treats "shared appreciation mortgage loans" as mortgage loans under Maine's Consumer Credit Code and treats their providers as supervised lenders.

• Requires homeowner counseling and preliminary and closing disclosures.
• Bans mandatory arbitration clauses and confidentiality provisions in these agreements.
• Addresses products made between October 29, 2025, when the state's Bureau of Consumer Credit Protection determined they are consumer credit transactions, and the law's effective date.

Sources: Maine Legislature: LD 1901 status · Law text (PDF)

Connecticut: shared appreciation agreements are residential mortgage loans

Connecticut's banking law defines shared appreciation agreements and includes them in "residential mortgage loan" for licensing purposes (General Statutes § 36a-485).

• A disclosure section, § 36a-498i, has been in effect since October 1, 2025. It requires disclosures within three business days of application, including repayment scenarios at several settlement points.

The definition is confirmed in the statute. The § 36a-498i details are as reported by the law firm analysis linked below.

Sources: Connecticut General Statutes, chapter 668 (§ 36a-485) · National Law Review: more regulation for HEI products secondary

Illinois treats shared appreciation agreements as mortgage loans (Public Act 103-1015)

Amends the Residential Mortgage License Act so that a "mortgage loan" includes one in which funds are advanced through a shared appreciation agreement.

• Requires counseling before a borrower takes any legally binding action on a shared appreciation agreement, and the borrower may not waive it.
• Lets the state's financial regulator adopt rules for these agreements, which it did in 2026.

Sources: Illinois General Assembly: SB 3551 as enacted

Maryland brings shared appreciation agreements under its Mortgage Lender Law (HB 1150, Chapter 568 of 2023)

Makes certain shared appreciation agreements subject to the Maryland Mortgage Lender Law and other laws regulating consumer credit, and authorizes the Commissioner of Financial Regulation to adopt rules.

Sources: Maryland General Assembly: HB 1150 (2023)

Illinois adopts rules for shared appreciation agreements

The Illinois Department of Financial and Professional Regulation adopted rules implementing the state's shared appreciation agreement law, effective June 1, 2026, covering counseling, disclosures, and recordkeeping.

We could not access the rule text in the Illinois Register directly. The details here are as reported by the law firms linked below.

Sources: Mayer Brown: Illinois adopts regulations secondary · Weiner Brodsky Kider: IDFPR adopts rules secondary

Maryland regulations for shared appreciation agreements (COMAR 09.03.15)

Rules from Maryland's Commissioner of Financial Regulation governing shared appreciation agreements took effect November 25, 2024.

Sources: Code of Maryland Regulations, 09.03.15

Minnesota attorney general settlement with Unlock

The attorney general's office investigated Unlock for entering into mortgage loans without complying with Minnesota law. Unlock denied the allegations but settled.

• From 2021 through 2023, Unlock entered into approximately 86 "home equity agreements" in Minnesota.
• Unlock agreed to $944,626 in monetary and debt relief: $201,050 in direct refunds, an estimated $460,000 in debt relief, and $283,576 for further restitution.
• Unlock agreed not to enter new agreements unless licensed by the Minnesota Department of Commerce, and to follow the state's Mortgage Originator and Servicer Licensing Act, including its rate caps.

Sources: Minnesota Attorney General press release

Colorado attorney general settlement with Unlock

The attorney general determined that Unlock's home equity agreements are consumer credit transactions under Colorado law.

• Unlock must comply with Colorado's Uniform Consumer Credit Code, including the Consumer Equity Protection Act, its rate limits, and its required disclosures.
• Unlock must obtain all required Colorado licenses before resuming operations there.
• As of the announcement, Unlock had identified $283,375 in restitution owed to 125 Colorado consumers, a figure the office expected to grow as more agreements close.

Sources: Colorado Attorney General press release · Assurance of discontinuance (PDF)

Massachusetts attorney general sues Hometap

Filed in Suffolk County Superior Court against Hometap Equity Partners, LLC and HomeTap Management Holdings, LLC.

• The attorney general alleges Hometap charged unlawfully high interest, made mortgage loans without adequate financial assessment or underwriting, offered illegal reverse mortgages that fail to comply with state consumer protection laws, and concealed the cost and nature of the product.
• The case is ongoing. News reports say the court has allowed it to proceed.

The case's current status is as reported by HousingWire.

Sources: Massachusetts Attorney General press release · HousingWire: Massachusetts lawsuit against Hometap proceeds secondary

Olson v. Unison Agreement Corp. (U.S. Court of Appeals for the Ninth Circuit)

In August 2025 a Ninth Circuit panel, in an unpublished decision, held that Unison's agreement met Washington's definition of a reverse mortgage and revived the homeowners' consumer protection claims. After the parties settled, the court on October 17, 2025 granted their request to dismiss and vacated its August judgment, so the ruling does not stand as precedent.

The later dismissal and vacatur are as reported by HousingWire.

Sources: Ninth Circuit memorandum, August 2025 (PDF, via plaintiffs' counsel) · HousingWire: appeals court throws curve ball secondary

Home Equity Lending Integrity Act (S. 4803)

Would amend the federal Truth in Lending Act to include a home equity investment loan in the definition of a residential mortgage loan.

Sources: Bill text, U.S. Government Publishing Office

Pennsylvania HB 2120: licensing for shared equity providers

Would license and regulate shared equity providers and shared equity agreements under the Department of Banking and Securities.

• Passed the House 190 to 11 on June 2, 2026.
• Referred to the Senate Banking & Insurance Committee on June 5, 2026. It has not been signed into law.

Sources: Pennsylvania General Assembly: HB 2120

North Carolina HB 1211, the Home Equity Investment Loan Act

Would treat home equity investment loans as residential mortgages under state law, including licensing, usury, collection, and foreclosure rules.

• Referred to the House Committee on Rules, Calendar, and Operations on May 5, 2026.

The description of what the bill would do comes from the UNC School of Government's legislative summary.

Sources: North Carolina General Assembly: H1211 · UNC School of Government bill summary secondary

Shared Home Appreciation for Residential Equity Act (H.R. 8116)

A tax bill that would amend the Internal Revenue Code to exclude from gross income certain proceeds of shared appreciation mortgage contracts. Referred to the House Ways and Means Committee.

Sources: Bill text, U.S. Government Publishing Office

Washington HB 1464 would have licensed home equity sharing agreement originators

Would have required home equity sharing agreement (HESA) originators to be licensed by the Department of Financial Institutions by July 1, 2026.

• Would have capped the annualized cost of an agreement at 25%, required at least 10% beginning equity, and given homeowners three business days to rescind.
• The House Consumer Protection & Business Committee took no action on February 21, 2025. We found no record of enactment.

Sources: House bill analysis (Consumer Protection & Business Committee) · Washington Legislature: HB 1464

CFPB issue spotlight on home equity contracts

The Consumer Financial Protection Bureau estimated the market at $2 billion to $3 billion and warned that home equity contracts share features with risky mortgage products from before the 2008 financial crisis.

• The four largest companies had originated more than 37,000 contracts.
• Cost caps of around 18% to 20%, compounded monthly, work out to about 19.5% to 22% a year.
• Consumers reported surprise at repayment amounts, confusion about how caps work, disputes over home valuations, and trouble refinancing their first mortgage.

Sources: CFPB: Home equity contracts market overview

Washington DFI inquiry into home equity sharing agreements

Washington's Department of Financial Institutions opened an inquiry into home equity sharing agreements in 2024 and issued the first phase of its report on September 12, 2024.

• Nine providers responded to DFI's request for information about their origination, servicing, contract terms, disclosures, and calculations.
• DFI worked with the University of Washington's Evans School of Public Policy and Governance on a second phase.

Sources: DFI press release, September 12, 2024 · Phase one report (PDF)