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Unlock settles with Colorado over treatment of home equity agreements
The settlement requires the company to pay $283,375 in restitution to 125 homeowners, and the total is expected to increase as more loans close.
HousingWire reports that Unlock reached a settlement with Colorado’s attorney general requiring the company to treat its home equity agreements as consumer credit under the state’s Uniform Consumer Credit Code.
The Colorado attorney general’s office said regulators determined Unlock’s home equity agreements function like loans, meaning they must follow Colorado’s consumer protections, including interest rate caps, mandatory disclosures, and licensing rules. The agreements are structured as lump-sum cash payments in exchange for a percentage of a homeowner’s future home value, regardless of whether the property appreciates or depreciates.
As of June 24, Unlock identified $283,375 in restitution owed to 125 Colorado homeowners whose contracts exceeded state interest rate limits. The amount is expected to rise as additional loans close in coming months and years.
In a statement, Attorney General Phil Weiser said the agreement is meant to ensure homeowners receive restitution and that Unlock will follow Colorado lending laws going forward. Unlock also told HousingWire it stands by the integrity of its home equity agreement and said the resolution was negotiated.