Judge blocks key Hometap defenses in Massachusetts HEI lawsuit

"The state alleges that Hometap's flagship home equity investment (HEI) product is an illegal, deceptive, oppressive and unconscionable mortgage that violates the criminal usury statute. Squires-Lee's ruling means that Hometap cannot argue that earlier interactions with state regulators including meetings in which the company says it described its product and was not told to stop prevent the AG from pursuing the case."

"The litigation, filed in February 2025 by Massachusetts Attorney General Andrea Joy Campbell, accuses Hometap of widespread violations of state consumer protection statutes, including mortgage and foreclosure prevention laws. The complaint alleges the company pervasively and systematically violated the state's consumer protection laws, including mortgage and foreclosure prevention laws, putting financially vulnerable homeowners at high risk of losing their homes."

"At the center of the case are Hometap's HEIs. In exchange for what the company markets as debt-free cash, homeowners agree to give Hometap a share of their home's future value. State officials argue these arrangements are not true investments, but rather illegal reverse mortgages that fail to comply with state consumer protection laws. Campbell said the company's practices target homeowners with limited financial options."

Massachusetts Attorney General filed a lawsuit in February 2025 accusing Hometap of pervasive violations of state consumer protection, mortgage, and foreclosure prevention laws. The complaint alleges Hometap’s home equity investments (HEIs) operate like illegal reverse mortgages by taking shares of future home value in exchange for marketed "debt-free" cash, placing financially vulnerable homeowners at high risk of foreclosure. A court ruling prevents Hometap from using prior regulator interactions to block the case, allows limited discovery about regulator communications, and bars access to internal government deliberations. Hometap maintains HEIs are investments, not loans.

Read at www.housingwire.com