Article Summary
A federal lawsuit in North Carolina alleges Unison’s home equity sharing agreements are predatory, unlicensed mortgages disguised as option contracts.
Plaintiffs say they owe far more than they received — one couple got $61,000 but may owe $270,000.
The case cites a Ninth Circuit ruling and could force the equity-sharing industry to abide by mortgage regulations.
A federal lawsuit filed last week in North Carolina accuses a popular home equity investment (HEI) company of trapping homeowners in predatory mortgages.
The complaint states that Unison’s agreements are “high-cost, nonrecourse mortgage loans” dressed up in “confusing” contracts to dodge state lending laws.
It further alleges that Unison “systematically misrepresents how the product works, the company’s relationship to the homeowner and the substantial costs involved.”
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Plaintiffs Lara Petty, Thomas and Leslie Shiel, and Nikolas and Diana Moriates are North Carolina homeowners who say they ended up owing Unison far more than they ever received.
The Moriates, for example, got a net advance of about $61,000.
Unison now estimates they could owe nearly $270,000 to exit the agreement, according to the complaint.
Unison is accused of violating North Carolina’s high-cost home loan statute, which prohibits balloon payments, negative amortization and lending without proof of the borrower’s ability to repay.
“Unison attempts to sidestep these safeguards by calling its product an ‘option’ contract rather than a loan,” the complaint states.
The lawsuit also alleges Unison wasn’t licensed to make mortgages in North Carolina and failed to provide required lending disclosures.
It cites a 2025 ruling by the Ninth Circuit Court of Appeals — Olson v. Unison Agreement Corp. — which found that Unison’s product functioned as a reverse mortgage despite the company’s “option contract” label.
The complaint accuses Unison of deducting fees from the homeowner’s upfront payment, recording a deed of trust on the home and collecting a percentage of the home’s future value — often 50% or more — when the agreement ends.
Petty alleges that Unison deducted more than $4,500 in fees from a $69,750 initial payment, according to the complaint.
“Stripped of deliberately complex accounting, lengthy contracts, and opaque terminology, Unison’s product is a loan,” the lawsuit states.
The home equity investment industry has attracted regulatory and legal scrutiny across the country, with class actions filed in California and Colorado, as well as a suit filed by a consumer advocacy group in the District of Columbia.
The North Carolina case could be significant because it tests whether home equity sharing agreements are actually mortgages — a question courts are still wrestling with. If judges side with plaintiffs, it could force the entire HEI industry under the mortgage regulatory umbrella.
“Unison’s products are structured to ensure substantial profits at the expense of homeowners,” the North Carolina complaint states.
