Squires-Lee’s ruling means Hometap cannot argue that past interactions with government regulators — including meetings in which the company says it described its product and was not told to stop — prevent the AG from pursuing the case.
The case itself continues, with the court allowing limited discovery regarding what Hometap was told by regulators – but it will not grant access to internal government deliberations.
The state alleges predatory practices
The lawsuit, filed in February 2025 by Massachusetts Attorney General Andrea Joy Campbell, accuses Hometap of widespread violations of state consumer protection statutes, including mortgage and foreclosure prevention laws.
The complaint alleges that the company has “pervasively and systematically violated state consumer protection laws, including mortgage and foreclosure prevention laws, placing financially vulnerable homeowners at high risk of losing their homes.”
At the center of the case are Hometap’s higher education institutions. In exchange for what the company markets as “debt-free cash,” homeowners agree to give Hometap a share of their home’s future value.
State officials claim that these schemes are not true investments, but rather “illegal reverse mortgages that do not comply with state consumer protection laws.”
Campbell said the company’s practices target homeowners with limited financial resources.
“Amid a growing affordability crisis, our lawsuit alleges that Hometap deliberately preyed on financially vulnerable homeowners for profit, deprived them of their hard-earned home equity, and placed them at an unreasonably high risk of foreclosure,” Campbell said in announcing the lawsuit.
“Illegal Reverse Mortgage” Claim
Hometap claims that its higher education institutions are investments and not loans.
The attorney general’s office disagrees, pointing to features that the company says are mirror-reverse mortgages.
Unlike federally insured reverse mortgages – which require borrowers to be at least 62 years old – and many proprietary products with a minimum age requirement of 55, Hometap’s products have no age requirement.
Massachusetts law limits reverse mortgages to borrowers who are at least 60 years old. The state also requires protective measures such as a seven-day notice period and mandatory third-party counseling.
Because Hometap does not follow these rules, consumers are deprived of safeguards intended to prevent eviction and the loss of a home, the state argues.
Hometap calls the lawsuit unfounded.
“Hometap strongly believes in the integrity of our products and the financial flexibility they provide to homeowners in Massachusetts,” the company previously said. HousingWire‘s Reverse Mortgage Daily. “We have pursued every avenue possible to engage in constructive dialogue with the Massachusetts Attorney General’s office. Unfortunately, these efforts have not been reciprocated and we believe they are pursuing a baseless lawsuit based on baseless claims.”
The case in Massachusetts continues as home value contracts come under increasing scrutiny across the country.
A lawsuit in Washington state over whether home investments are disguised as reverse mortgages ended with a settlement in October Ninth Circuit Court of Appeals panel ruled that Unison’s product qualified as a reverse mortgage.
Similar lawsuits against higher education institutions are pending in Colorado and New York.
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