A legal battle over the validity of home equity investments (HEIs) and whether they should be classified as reverse mortgages has come to an end in Washington state.
Unison, one of the nation’s leading providers of HEI products, settled the case with plaintiffs Charles and Janine Olson, according to court documents reviewed by HousingWire’s Reverse Mortgage Daily (RMD).
The settlement, announced last week, came on the heels of an opinion issued by the Ninth Circuit Court of Appeals. The three-judge panel ruled in August that Unison’s HEI product amounted to a reverse mortgage, reversing an October 2023 ruling in favor of Unison from the U.S. District Court for the Western District of Washington.
On Oct. 17, the appeals court panel granted the parties’ request to dismiss the case after Unison initially sought a rehearing. An attorney representing Unison declined to comment on the case when reached by RMD.
Plaintiffs’ attorney Thomas Scott-Railton of Gupta Wessler LLP issued a statement to RMD that lauded the decision of the appeals court.
“The Ninth Circuit’s order just reflects the fact that the parties settled the case. The Ninth Circuit’s prior opinion, which explained that Unison’s product is a hidden reverse mortgage and that Unison deceives homeowners, remains on the books,” Scott-Railton said.
“That decision joined a clear and growing consensus from courts across the country: Recent decisions in Colorado, New York, and Massachusetts all confirm that these hidden reverse mortgage products cannot escape laws protecting homeowners.”
Unison is facing similar accusations in Colorado. Plaintiff Deborah Dee Stone accused the company of unfair and deceptive acts and practices, and violations of reverse mortgage lending laws, among other allegations. In late July, a bankruptcy court judge left most of the plaintiff’s claims for relief in place.
“The court found that Ms. Stone adequately alleged facts that the product was a loan that had to be repaid, rejecting Defendants’ argument that it was an option contract,” according to the National Consumer Law Center’s commentary on the case.
Unison is also being sued in the U.S. District Court for the Eastern District of New York. In July, the magistrate judge in that case recommended a partial summary judgment in favor of Unison while advising against a full dismissal.
Another HEI provider, Hometap, was sued in February 2025 by Massachusetts Attorney General Andrea Joy Campbell. The AG claims that Hometap’s primary product offerings constitute “illegal reverse mortgages that fail to comply with state consumer protection laws.”
Hometap issued a statement to RMD at the time in which it defended “the integrity of our products and the financial flexibility they provide to Massachusetts homeowners.”
According to reporting by the CommonWealth Beacon, Hometap’s move to dismiss the complaint was denied in September by Suffolk County Superior Court Judge Debra Squires-Lee. Her ruling noted that Hometap’s ability to quickly provide funds to a homeowner is tied to a lack of regulatory guardrails for its HEI product.
“Hometap can only provide cash quickly if the HEI product is not governed by the regulations put in place with respect to reverse and subprime mortgages,” Squires-Lee wrote. “Thus, in marketing the HEl, Hometap neither ensures that it provides money only to homeowners with the ability to repay, as with traditional mortgages, nor complies with the strict regulatory limits on reverse mortgages.”
The CommonWealth Beacon also noted that legislation has been introduced in Massachusetts that would more clearly define a “shared equity investment” and create a licensing system for these investors. The proposals have yet to advance out of the committee stage.
