Appearing in The New York Times on November 6, 2026, Ann Carrns references a National Consumer Law Center issue brief in coverage of how a crop of financial technology firms is promoting a newer product known as a home equity investment — or, sometimes, a home equity “contract” or “equity sharing” agreement. It’s often described as an alternative, “flexible” way for homeowners to tap their home equity. The product gives homeowners a cash payment in exchange for a share in their property’s future value. The contracts are increasingly packaged as securities and sold to large investors.
The firms say the contracts don’t require homeowners to take on new debt or make monthly payments, and aren’t a form of debt. But some state authorities and consumer advocates say the contracts are, in fact, a type of home loan, with complex, often confusing terms that can put unwitting borrowers at risk of having their equity drained or even losing their homes. The firms, these skeptics say, “mislabel” the transactions as investments or options to evade the consumer protections that accompany traditional home loans.
“Whatever this product is called, it is a loan masquerading as obligation-free cash,” says a brief from the National Consumer Law Center. The center has filed lawsuits challenging the contracts in two states.
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