Point HEI Lawsuit: Muskal Ruling and Loan Classification

The Point HEI lawsuit, Muskal v. Point Digital Finance, produced a December 19, 2025 ruling from an Arizona Superior Court judge that Point’s home equity investment contract is a form of credit subject to the federal Truth in Lending Act. That finding blocked Point from forcing the homeowner’s claims into private arbitration and let the case proceed in court, and it aligns with a run of 2025 decisions treating HEI products as loans despite the industry’s insistence they are investments or option agreements.¹

What the Muskal Ruling Decided

Steven Muskal filed suit against Point on July 15, 2025, in Arizona Superior Court (Case No. CV 2025-024855). He alleged Point’s HEI contract violated Arizona consumer protection law and the federal Truth in Lending Act, argued the agreement was unconscionable, and asked the court to rescind it entirely.¹

Point moved to compel arbitration under a clause in the contract. The judge denied that motion on December 19, 2025. The reasoning turned on a threshold classification: Point’s HEI is “credit” under federal law, which makes it subject to TILA. Section 1639c(e) of TILA bars mandatory arbitration clauses in mortgage contracts, so once the court categorized the HEI as mortgage-related credit, Point’s arbitration clause could not be enforced.¹

The dispute has also generated a federal filing captioned Muskal v. Point Digital Finance, Inc., et al. in the Northern District of Illinois (Case No. 1:26-cv-00646), naming Point and Deer Park 1850 Fund, L.P. as defendants. The docket was active as of June 2026. Specific claims in that federal proceeding have not been publicly detailed.²

What a Point HEI Actually Is

A Point home equity investment gives a homeowner a lump sum of up to $600,000 in exchange for a share of the home’s future change in value. There are no monthly payments. The contract runs up to 30 years and is nonrecourse, so the homeowner cannot owe more than the home is worth. Point files a deed of trust against the property but is not added to the title.³⁴

The homeowner settles by selling, refinancing, or making a lump-sum payment at any time during the term. Point says it caps its share of the gains above a preset appreciation threshold and that its average investment equals about 16% of the home’s current value. Point states it has never foreclosed on a homeowner. Eligible homes must be worth at least $155,000, the minimum credit score is 500, and the product is sold in 29 states. Point’s own site calls the HEI “an expensive decision.”⁴⁵

Why the “Is It a Loan?” Question Drives Everything

HEI providers have marketed these contracts as option agreements or investments, arguing that without a monthly payment or a stated interest rate the product falls outside mortgage lending law. If that framing holds, TILA disclosures do not apply, mandatory arbitration remains enforceable, and state usury caps and mortgage licensing rules do not reach the contract. If courts see a loan instead, all of those consumer protections snap into place.

On January 15, 2025, the Consumer Financial Protection Bureau published a market report, a consumer advisory, and an amicus brief in Roberts v. Unlock Partnership Solutions AOI, Inc. (D.N.J., Case No. 1:24-cv-1374) arguing that HEIs are credit under TILA. The bureau urged courts to look at “the economic reality of the transaction rather than the labels affixed.” In the Unlock brief, the CFPB walked through a contract that paid a homeowner about 44% of the home’s value upfront and required repayment of 70% of the home’s value, or principal plus 18% annual interest, within ten years. The bureau argued the provider would still profit even if the home lost 39% of its value, cutting against the claim that the company shared meaningful investment risk.⁶

The CFPB’s January 2025 overview calculated that HEI settlement amounts can grow at effective annual rates of 19.5% to 22%, higher than standard home-secured credit. The bureau identified four dominant providers: Unison, Point, Hometap, and Unlock.⁷

Other Courts Have Reached Similar Conclusions

The Arizona ruling is not isolated. In August 2025, the Ninth Circuit ruled in Olson v. Unison Agreement Corporation that Unison’s HEI was effectively a reverse mortgage under Washington state law. The Olsons had received $64,750 from Unison in exchange for an interest of up to 70% of the equity in a home valued at $370,000. The court found the “entire structure” of the agreement gave Unison “the substance of a shared-appreciation reverse mortgage,” regardless of the “no loan” and “no interest” labels used in marketing. The parties later settled and the judgment was vacated, but the reasoning stands as persuasive authority.⁸⁹

In Massachusetts, Attorney General Andrea Campbell sued Hometap Equity Partners, alleging its HEI was an “unlawful mortgage loan.” The complaint said Hometap acquired an equity stake up to twice the cash it paid homeowners, charged effective interest rates above the state’s 20% criminal usury cap, and performed no income or employment verification. A Suffolk County Superior Court judge denied Hometap’s motion to dismiss in September 2025.¹⁰

A Colorado bankruptcy court in Stone v. Real Estate Equity Exchange rejected an HEI provider’s option-agreement framing, finding the debtor “adequately alleged facts that the product was a loan that had to be repaid.” The court allowed claims for unconscionability, unfair and deceptive practices, usury, and violations of Colorado mortgage and reverse mortgage lending laws to proceed, and it left open the possibility that the HEI could be treated as an executory contract in bankruptcy, letting the homeowner reject its future obligations.¹¹

In New York, a federal judge in Weingot v. Unison Agreement Corporation denied summary judgment on fraud and rescission claims in September 2025, finding genuine disputes about whether Unison’s marketing misled the homeowner. Yisroel Weingot testified that he did not understand the contracts and that his questions went unanswered. The court noted Unison’s website described the deal as “sharing in appreciation” while the contract functioned as an option to purchase a large stake in the home.¹²

What Homeowners Have Complained About

The CFPB reviewed 38 complaints about home equity contracts and found that 29% of published complaint narratives described the products as “predatory.” Homeowners reported confusion over the size of final repayment amounts, difficulty refinancing because the HEI lien complicated their existing mortgage, and the sense that selling was their only exit. One consumer told the CFPB: “Unfortunately, they never explained that the only option I would only have is to sell because my debt to loan ratio exceeds what I can get to pay them back.” That homeowner said they had told the company at origination they would not sell, then discovered they could not qualify for a refinance to pay Point off.⁷

The Better Business Bureau has logged 26 complaints against Point Digital Finance over the last three years. Common themes: disputes over property valuation methods, delays and communication problems during the application, allegations of unauthorized hard credit inquiries, and questions about how payoff amounts are calculated. Some complaints alleged predatory conduct involving elderly or medically vulnerable homeowners.¹³

The CFPB added a timing caveat: because HEI providers have been operating for less than a decade, most contracts have not yet reached their end-of-term repayment dates. The full scale of forced sales or foreclosure-like pressure as early contract cohorts mature is still ahead.⁷

States Are Reclassifying HEIs as Mortgage Loans

Legislatures have begun closing the gap between how HEIs are marketed and how regulators say they function. On April 17, 2026, Maine became the first state to enact a comprehensive HEI statute. Governor Janet Mills signed LD 1901, which classifies HEI contracts as “shared appreciation mortgage loans” and subjects them to mortgage lending oversight. The law requires enhanced cost disclosures, mandatory housing counseling, legal representation for borrowers before closing, and limits on clauses that restrict how homeowners use their property. It also imposes assignee liability, so buyers of HEI contracts remain responsible for origination-stage violations.¹⁴¹⁵

Connecticut and Maryland already define shared appreciation agreements as mortgage loans. Illinois amended its Residential Mortgage License Act effective January 1, 2025, to cover shared appreciation agreements, and its regulators proposed implementing rules in August 2025 that would mandate borrower counseling, restrict balloon payments within the first five years, and require mortgage-style disclosures. Colorado’s Division of Real Estate adopted a January 2026 position statement on licensing requirements for HEI originators. Washington proposed HB 1464, which would require an HEI lending license, a $30,000 surety bond, a 25% cap on the annualized cost of the agreement, and independent third-party appraisals. Pennsylvania introduced HB 2120 in January 2026 to bring shared equity agreements under its residential mortgage law.¹⁶¹⁷

What This Means for Point and Its Customers

If the classification adopted by the Arizona court holds, Point’s HEI is subject to TILA disclosures, arbitration clauses in existing HEI contracts cannot be enforced, and homeowners can bring rescission and consumer protection claims in court. Similar rulings against Unison, Hometap, and Real Estate Equity Exchange suggest the trend is not confined to one judge or one state. The maturation of early HEI contracts, combined with new state statutes like Maine’s, will keep pressure on Point to defend the option-agreement framing that its business model depends on.

Point has originated more than 4,200 HEI contracts totaling roughly $387 million according to a December 2024 filing with California’s Department of Financial Protection and Innovation, with the CFPB citing 10,000 originations in 2023 alone. In that same DFPI filing, Point asked California regulators to establish registration and data-reporting requirements for all HEI providers, even as it argues in court that its product is not the kind of credit existing lending laws were built to govern.⁴⁷

For a homeowner with a Point contract, the practical takeaway from the Muskal ruling is narrow but real: at least one court has said the arbitration clause in a Point HEI is unenforceable, and the same court has said Point’s product is credit under federal law. Whether that view spreads to other courts, and how Maine’s statute is echoed elsewhere, will decide whether HEIs continue to sit in a category of their own or fold into the same rulebook as any other mortgage.

1
National Consumer Law Center. Courts Expose Deception of Home Equity Investments
2
PACER Monitor. Muskal v Point Digital Finance, Inc., et al
3
Point Digital Finance. Point Home Equity
4
California Department of Financial Protection and Innovation. Point Digital Finance DFPI Submission
5
U.S. News & World Report. Point Digital Finance Home Equity Review
6
Consumer Financial Protection Bureau. CFPB Amicus Brief, Roberts v. Unlock Partnership Solutions
7
Consumer Financial Protection Bureau. Issue Spotlight: Home Equity Contracts Market Overview
8
HousingWire. Washington HEI Reverse Mortgage Ruling
9
Financial Services Perspectives. Olson v. Unison Agreement Corporation
10
Wolters Kluwer. Commonwealth v. Hometap Equity Partners Complaint
11
National Consumer Law Center. Stone v. Real Estate Equity Exchange
12
Casemine. Weingot v. Unison Agreement Corp.
13
Better Business Bureau. Point Digital Finance Inc. Complaints
14
National Consumer Law Center. Maine Governor Signs First-in-the-Nation Law to Protect Homeowners From Home Equity Investment Loans
15
HousingWire. Maine First State Law Home Equity Investment Loans
16
National Consumer Law Center. Home Equity Investment (HEI) Loans Practice Suite
17
Forbes. Home Equity Investments Face a Legal Reality Check