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Attorney General Andrea Campbell has filed a lawsuit in Suffolk County Superior Court against Hometap, a Boston-based fintech offering home equity loans.
The Boston-based home equity investment company founded in 2018 claims that it has tried to work with Campbell to resolve the allegations, but to no avail.
The lawsuit claims that Hometap violated the state’s consumer protection laws, including mortgage and foreclosure prevention laws, allegedly putting financially vulnerable homeowners at high risk of losing their homes. Additionally, Campbell’s office claims that Hometap unfairly put consumers at an unreasonably high risk of foreclosure and financial harm by collecting unlawfully high interest.
Campbell’s office also claims that Hometap made mortgage loans without adequate financial assessments or underwriting, offered illegal reverse mortgages and deceptively concealed the high cost and nature of their product. Campbell’s office said it believes that the product is actually far more costly to homeowners than its marketing suggests.
“Amidst a growing affordability crisis, our lawsuit alleges that Hometap deliberately preyed upon financially vulnerable homeowners for profit, stripping them of their hard-earned home equity and putting them at unreasonably high risk of foreclosure,” Campbell said in a statement. “Our lawsuit seeks to not only hold Hometap accountable for its unlawful practices, but also put other companies on notice that my office will continually seek to protect communities from predatory business practices.”
Hometap provided a statement provided to Banker & Tradesman that claims that the investment company has tried to work with Campbell, but has been unsuccessful.
“Hometap firmly believes in the integrity of our products and the financial flexibility they provide to Massachusetts homeowners,” the statement said. “We have pursued every possible avenue to engage in constructive dialogue with the Massachusetts Attorney General’s Office. Unfortunately, those efforts have not been reciprocated, and we believe they are pursuing an unfounded lawsuit predicated on meritless claims.”
