Unlock CEO says home equity investments need better regulations

"Shared-equity products are becoming a focus of regulators simply because the industry is growing. We always expected that this scrutiny would materialize. That's why we've been engaging with regulators for years, asking to be regulated."

"The core issue is a regulatory mismatch. What's happening with shared-equity products is what happens in category formation of any new and fast-growing product category. Existing rules and regulations weren't designed for the structure of a shared-equity product."

"One should recognize that the far stronger arguments favor treating SEPs as a distinct product class not because the industry seeks to avoid regulation, but because purpose-built regulation actually protects consumers better than frameworks designed for a fundamentally different product structure."

"It is absolutely accurate to market and describe shared-equity products as non-interest-based products. And it would be inaccurate to market SEPs as interest-based products. The mechanics are completely different."

Shared-equity products are under regulatory scrutiny as the industry expands. This scrutiny arises from a regulatory mismatch, as existing rules do not fit the structure of shared-equity products. Regulators often default to familiar mortgage regulations, which may not be suitable. Strong arguments exist for treating shared-equity products as a distinct class, as purpose-built regulations can better protect consumers. Marketing shared-equity products as non-interest-based is accurate, as their mechanics differ significantly from traditional interest-based products.

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