Unison faces another class action lawsuit in North Carolina

Unison Faces New North Carolina Class Action

Five North Carolina homeowners sued Unison in a North Carolina federal court last week, alleging the shared appreciation agreements they signed were allegedly deceptive and unlawful.

The case marks yet another class-action lawsuit against one of the largest players in the growing home equity investment sector. Consumers and regulators increasingly argue these products should be treated as residential mortgage loans under current state and federal law.

The lawsuit alleges violations of North Carolina's unfair and deceptive trade practices law and seeks class status for all affected state residents who signed Unison contracts.

Plaintiffs estimate the potential class could possibly include hundreds of North Carolina residents who entered similar Unison shared appreciation agreements across the state during recent years.

A separate class action against Unison filed in Colorado this spring now remains pending in that state's federal court system. Together, the two cases reflect mounting legal scrutiny of home equity investment products and their marketing practices in courtrooms nationwide.

Plaintiffs Detail Large Repayment Obligations

Each plaintiff describes a contract in which they would currently owe Unison sums at least two-to-three times greater than initial payments. One North Carolina family claims they could owe the provider up to $269,405 after receiving a Unison payment of $61,425.

Attorneys wrote that stripped of complex mathematical formulas, the practical result forces the homeowner to pay Unison far more than she received and far more than law allows.

The lawsuit describes Unison's arrangement, which pays a homeowner an initial sum for a large equity share in the property. Homeowners owe no monthly payment or interest, but must pay a lump sum at the end based on a formula.

Consumers point to origination fees exceeding five percent of the initial Unison payment, which plaintiffs say far exceed costs for home equity lines or reverse mortgages.

The arrangement requires repayment when an exercise event occurs, meaning the end of the specific contract and the repayment period according to the formal written complaint.

Additional Allegations and Company Profile

Plaintiffs raise other legal concerns, specifically including an alleged prepayment penalty if they sell their current home within three years of signing the original Unison contract.

The lawsuit alleges Unison uses appraisal vendors who deliberately minimize home appraisal values to maximize the company's overall future returns. It also claims Unison can alter the value formula if it determines the homeowner failed to properly maintain the property.

The lawsuit seeks to cover a potential class of all North Carolina residents who entered a Unison agreement, a number plaintiffs estimate could reach roughly hundreds.

According to Unison's website, the company has partnered with over 17,000 homeowners nationwide and invested $8.8 billion in residential property. Unison also claims it has helped consumers pay off $27 million in mortgage debt and $163 million in larger debts.

Another class action against Unison in Colorado filed this spring remains pending, underscoring growing legal scrutiny from state and federal regulators of home equity investment products.