- United States District Court, District of Minnesota
- Case No. 0:26−cv−04268−DWF−DTS
- Keith Allen, et al. v. Unison Agreement Corporation, et al.
For many Minnesotans, owning a home is a cornerstone of economic mobility, financial stability, and personal security. Home equity is often a person’s largest asset. Over time, many homeowners will access the equity in their home to assist with other financial obligations, such as supplementing retirement, education, home improvements, or long-term care costs for themselves or a loved one. For others, their home is a primary source of generational wealth that will be passed on to their children and family members.
Today, the home equity market is valued at approximately $35 trillion dollars and is the largest asset class in the United States. In recent years institutional and high-net-worth investors have been seeking a piece of that pie for themselves in ways that are increasingly unfair or deceptive to homeowners. Enter Unison.
Unison created a new lending product, known as a home equity sharing agreement, which provides homeowners with an upfront payment of cash in exchange for a percentage stake in the home’s future value. To entice homeowners, the company markets itself as a “simple” “loan alternative” option that creates “no debt” and has “no interest” or monthly payments. The problem is that Unison’s product is a mortgage loan. Its product does create debt, and the homeowner will almost certainly be required to repay every penny they receive, plus interest in the form of a significant lump sum ballon payment at the conclusion of the term.
The final payment is often multiple times more than the homeowner was initially advanced. It is often so exorbitant that homeowners must sell their home in order to pay it, with many walking away from the sale with little to show for the equity they worked hard to amass over time.
Unison deceptively claims that its product is an “option contract” and not a mortgage loan and therefore, is not required to comply with the strict federal or state lending laws that govern mortgage products. The federal lending laws that Unison disregards include licensing and disclosure requirements that would require it to be honest about the nature and cost of its transactions. Further, Minnesota’s consumer protection and mortgage licensing and lending laws prohibit Unison from the many unfair, deceptive, and misleading practices it engages in to obscure the truth about the nature and cost of its product. Minnesota forbids predatory mortgage lending that puts Minnesotans’ equity and housing stability at risk. Minnesota additionally requires licensure of lenders and strict compliance with statutory interest rates for loans less than $100,000.
Unfortunately, at the time homeowners execute a Unison agreement, they are not aware of the consequences. This is through no fault of their own—in fact, Unison’s product is designed to prevent the consumer from understanding the full scope of the agreement prior to entering into the loan. The Unison transaction is reflected in a web of interlocking agreements spanning multiple documents, which contain confusing cross references and approximately a dozen different formulas for calculating repayment. Only a notary attends the closing, so there is no Unison representative to answer any questions the homeowner may have when signing. Not even experienced mortgage bankers understand the nature of Unison’s product.
By the time homeowners discover the truth of the Unison product they are already locked into the agreement, and their home is encumbered by a deed of trust. At this point, the only way out is to find a significant amount of cash, often in the six figures, to buy out Unison, or sell their home. Homeowners who have spent years working hard, saving, and building equity are left holding the bag, while Unison and its investors reap annualized profits of over 20%.
For Unison, business is booming. It has agreements with over 17,000 homeowners nationwide, in properties cumulatively valued at $8.1 billion dollars, including with homeowners within Minnesota.
Keith and Dawn Allen (the “Allens”) are two Minnesotans currently ensnared in a Unison Agreement. Because Unison products wreak significant havoc on the economic well-being of Minnesota homeowners, Plaintiffs, on behalf of themselves and others similarly situated, bring this action to enforce Minnesota consumer protection laws against Unison for its ongoing unfair and deceptive practices in Minnesota that harm Minnesota residents. Plaintiffs bring this action on behalf of themselves and all other similarly situated Minnesota residents who have entered into Unison Agreements relating to property located in Minnesota. Plaintiffs seek to hold Unison liable for its violations of Minnesota’s mortgage, lending, and consumer protection laws.
Bryson Attorney: Scott Harris with co-counsel Anne Regan, Neven Selimovic, Catherin Posch-Johnson and Sarah Loken of Hellmuth & Johnson, PLLC