Hometap Lawsuit: MA AG Case, NJ Class Action, and Defense

The Hometap lawsuit landscape includes two active cases: a February 2025 enforcement action by the Massachusetts Attorney General accusing the Boston-based company of running an illegal reverse mortgage program disguised as a “home equity investment,” and a February 2026 federal class action in New Jersey making similar claims under the Truth in Lending Act and state consumer protection laws. Hometap’s motion to dismiss the Massachusetts case was denied in August 2025, and both cases are moving toward discovery and trial.

The Core Allegation Against Hometap

Hometap sells a product it calls a Home Equity Investment, or HEI. A homeowner receives a lump sum, typically $50,000 to $125,000, in exchange for giving the company a percentage share of the home’s future value. There are no monthly payments. Within ten years, the homeowner has to settle by buying Hometap out, refinancing, or selling. If none of that happens, the company can force a sale or start foreclosure.¹

Hometap markets this as “not a loan,” with “no interest” and “no debt.” Both lawsuits argue that framing is the deception. Regulators and plaintiffs contend the product is functionally a high-cost mortgage — cash advanced today against a home, secured by a lien, with a large payment obligation at the end — and that calling it an “option contract” or “investment” is a way to avoid the licensing, disclosure, rate-cap, and consumer protection rules that would otherwise apply.

The financial stakes in the allegations are large. In the Massachusetts complaint, a hypothetical homeowner who received $100,000 in cash and expected to owe about $155,000 at settlement would actually owe more than $311,000 based on historical appreciation trends.² The federal class action puts the effective annualized return cap on the product it challenges at roughly 18% to 21.5%, well above New Jersey’s 6% interest cap.³

The Massachusetts Attorney General’s Case

Attorney General Andrea Joy Campbell sued Hometap Equity Partners, LLC and HomeTap Management Holdings, LLC in Suffolk County Superior Court on February 20, 2025, calling it the first state enforcement action of its kind in the country.²

The complaint’s central claim is that Hometap’s product is legally a reverse mortgage, and an illegal one, because it doesn’t meet Massachusetts requirements for reverse mortgages: borrowers limited to age 60 and over, mandatory third-party counseling, and a seven-day cancellation window. The state also alleges Hometap targeted “house rich, cash poor” homeowners, including retirees, people with low credit scores, and those carrying heavy debt, with fast-cash offers that involved no income verification and no assessment of the homeowner’s ability to make the large lump-sum payment at the end of the term. The Attorney General calls the structure a “ticking time bomb” that leaves homeowners at an unreasonably high risk of foreclosure or forced sale.²

The state is asking the court to enjoin Hometap’s current practices, order financial restoration for affected consumers, and put protections in place to prevent foreclosures on properties already encumbered by Hometap contracts. Hundreds of Massachusetts homeowners are covered, across both active and settled agreements.²

Where the Case Stands

Hometap moved to dismiss, arguing its products are option contracts and that mortgage and consumer protection statutes simply don’t apply. On August 21, 2025, Suffolk County Superior Court Justice Debra Squires-Lee denied the motion. She ruled that the products “could be considered loans” and that the questions belonged in discovery and trial.⁴ Justice Squires-Lee found that Hometap faced “no substantial risk” of losing its principal and never intended to own the homes, only to recoup its funds through sale or repayment, which she treated as hallmarks of a loan regardless of the contract’s labels.⁵

She also let the deceptive marketing claims proceed, finding that “half-truths, omissions, and misleading statements” in Hometap’s marketing were not cured by written disclosures, and that because HEIs are unregulated as their own category, measuring the product against existing mortgage and consumer credit laws was appropriate.⁴

In December 2025, the court granted in part the state’s motion to strike Hometap’s affirmative defenses, eliminating the company’s estoppel and unclean-hands defenses and allowing only limited discovery into Hometap’s past communications with the Attorney General’s Office and the Division of Banks.⁶ The case has been in document discovery since late 2025.⁷

The Federal Class Action in New Jersey

Lead plaintiffs Keicha Greenidge and Ryan P. Billey filed a proposed class action on February 12, 2026 in the U.S. District Court for the District of New Jersey, captioned Greenidge, et al. v. Hometap Equity Partners, LLC et al., Case No. 3:26-cv-01431. The defendants are Hometap Equity Partners, LLC and Hometap Investment Partners III SPV, a Delaware special purpose vehicle that serves as the contractual counterparty on HEI agreements.³

The complaint brings claims under the federal Truth in Lending Act, the New Jersey Home Ownership Security Act, the New Jersey Consumer Fraud Act, and the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act. The plaintiffs allege Hometap deliberately labels the product an “Option Purchase Agreement” to sidestep the licensing, disclosure, and consumer protection requirements that apply to mortgage lenders.⁸

The named plaintiffs received a $103,575 investment, about 13% of their home’s value, and paid a $3,107.25 origination fee. Under the contract, they could be required to pay Hometap up to double the principal to settle. The complaint pegs the effective annualized rate cap at roughly 18% to 21.5%, far above New Jersey’s 6% legal maximum.³

The suit also challenges Hometap’s mandatory arbitration clause, arguing that TILA expressly forbids such clauses in residential mortgage contracts. The proposed class covers everyone who entered a Hometap option purchase agreement in the three years before filing. The case is before Judge Georgette Castner and remains pending.⁹

Hometap’s Defense

Hometap denies that its product is a loan. The company describes the HEI as an option contract that gives it the right to buy a stake in a home under specific conditions, offering “alternative and flexible” financing without traditional repayment.⁴

A company spokesperson said in response to the Massachusetts action that Hometap “firmly believes in the integrity of our products and the financial flexibility they provide to Massachusetts homeowners” and called the state’s suit “unfounded” and “predicated on meritless claims.” The company said its attempts at “constructive dialogue” with the state had “not been reciprocated.”¹⁰

The industry has taken a similar line. In March 2026, the Coalition for Home Equity Partnership said existing mortgage regulations are “incompatible” with shared equity products and that any consumer protections should be tailored to HEIs rather than imported from mortgage law.⁷

How the Wider HEI Case Law Is Trending

Courts elsewhere have been reaching conclusions that cut against Hometap’s framing. In August 2025, the Ninth Circuit ruled in Olson v. Unison Agreement Corp. that a competing HEI product is “credit” under the plain meaning of the word, because it involves an advance of funds coupled with a duty to make future payment. The court described the product as having the “substance of a shared-appreciation reverse mortgage” and said marketing it as involving “no interest” had the “capacity to deceive.” Unison petitioned for rehearing.⁵¹¹

A Colorado bankruptcy court in 2025 allowed a homeowner to challenge an HEI as a loan, and an Arizona state court found an HEI arbitration clause unenforceable because the product qualifies as credit subject to TILA’s ban on mandatory arbitration in mortgage contracts.⁵ In New Jersey, Unlock settled with homeowner Angela Roberts after a federal judge indicated her HEI was a disguised residential mortgage loan; in Washington, Unison settled with older homeowners Charles Boyd and Janine Olson after the Ninth Circuit ruling.¹²

None of those cases binds the Massachusetts or New Jersey courts hearing the Hometap matters, but they show the direction of the case law: judges are increasingly willing to look past HEI labels to how the product functions.

What Hometap Customers Should Know

If you have a Hometap contract, neither lawsuit gives you an automatic remedy. The Massachusetts case is in discovery; the New Jersey class action is still at the pleading stage, and the proposed class covers people who entered an option purchase agreement in the three years before the February 2026 filing.⁸ Whether you’re inside that window matters if the class is certified.

Consumer complaints filed with the Better Business Bureau describe patterns worth checking against your own paperwork: settlement figures much higher than expected (one consumer reported a 39% effective rate two years into a ten-year term), appraisals homeowners believe were undervalued to inflate Hometap’s future share, difficulty getting the company to release liens and UCC filings after payoff, and UCC filings that some homeowners read as covering personal property inside the home in addition to the home itself.¹³ These are individual accounts, not adjudicated findings, but they overlap with what the Attorney General and the class plaintiffs allege.

One structural fact matters for the years ahead: no Hometap contract has yet reached its ten-year maturity date, so no end-of-term foreclosures have occurred. The company points to that record; the Massachusetts Attorney General frames the same fact as evidence that the reckoning is still to come.¹⁴

1
Consumer Financial Protection Bureau. Issue Spotlight: Home Equity Contracts Market Overview
2
Massachusetts Attorney General’s Office. AG Campbell Files Nation-Leading State Enforcement Action Against Home Equity Investment Company
3
ClassAction.org. Greenidge v. Hometap Equity Partners, Complaint
4
Commonwealth Beacon. Flexible Financing or Illegal Reverse Mortgage? Court Allows Suit Over Home Equity Investments to Move Forward
5
National Consumer Law Center. Courts Expose Deception of Home Equity Investments
6
Massachusetts Lawyers Weekly. Commonwealth v. Hometap Equity Partners, Decision and Order
7
HEL News. HEI Lawsuits
8
ClassAction.org. Class Action Lawsuit Alleges Misbranded Hometap HEI Loans Are Predatory, Illegal
9
Law360. Greenidge v. Hometap Equity Partners
10
News from the States. AG Campbell Sues Boston-Based Home Equity Investment Firm Hometap
11
Financial Services Perspectives. Home Equity Investment and Shared Appreciation Agreements as Reverse Mortgages in Washington
12
New America. Home Equity Investment Loans: Subprime Balloon Mortgages Coming to a Neighborhood Near You
13
Better Business Bureau. Hometap BBB Complaints
14
Hometap. Hometap Closing $300M Securitization