Home equity “investment” (HEI) loans are a predatory scheme that preys on homeowners with significant equity in their homes. These complex, high-cost loans offer a lump sum of cash in exchange for a percentage of the home’s future value, with the full amount owed upon a “triggering event” like the home’s sale or the homeowner’s death. To protect homeowners, states can classify HEI loans as mortgages subject to consumer protections, require caps on the maximum repayment amount, and mandate counseling for borrowers.
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