Unison, one of the nation’s leading providers of home equity investments (HEIs), is facing a lawsuit from the National Association of Consumer Advocates (NACA), alleging that Unison deceptively markets its product as a “no-debt” home equity alternative.
According to the complaint, Unison’s product functions similarly to a mortgage as homeowners receive an upfront cash advance secured by a lien on the property and must later repay a larger lump sum. In many cases, repayment occurs through the sale of the home or foreclosure. The liens are then bundled into investment funds by Unison affiliates and sold to investors, the lawsuit alleges.
Unison did not immediately respond to HousingWire’s request for comment.
“These agreements lead homeowners to believe they’re accessing their equity safely, yet they are being locked into complicated, one-sided contracts that can wipe out a lifetime of earned savings,” William Alvarado Rivera, senior vice president of litigation at AARP Foundation, said in a statement. “Misleading products like Unison’s can undermine the security people need as they age.”
NACA is represented in the case by its in-house attorneys, AARP Foundation and Singleton Schreiber. The lawsuit was filed Wednesday in the Superior Court of the District of Columbia on behalf of the public interest, seeking to protect D.C. residents from alleged unfair and deceptive practices.
The complaint argues that Unison’s product constitutes an unlicensed mortgage that fails to comply with federal and local consumer protection laws.
Despite this, NACA says the company promotes the offering as an “equity sharing agreement” or “home equity investment” that involves no debt, carries no interest and requires no monthly payment. The group characterizes these labels as misleading because they frame the transaction as a simple partnership rather than a high-cost loan. NACA is seeking to halt Unison’s practices in Washington, D.C., and void existing agreements.
Unison has faced related legal scrutiny in the past, including an October settlement with a couple in a case that examined whether HEIs should be classified as reverse mortgages.