"In 2024, roughly 35% of applications for cash-out refinances, home improvement loans and home equity lines of credit (HELOCs) were denied, compared to just 9.8% of home purchase loans."
"Homeowners who utilize HEIs typically tap about 15% of their home value, and more than 40% of these consumers are 55 or older."
"Litigation is also building across states. In Colorado, a lawsuit filed in April alleges homeowners were trapped in contracts that could require up to $278,000 to exit after receiving about $87,000 upfront."
"Consumers are now realizing in real time, my house appreciated X percent over the past five, six, seven, eight years, and I need to give the originator 20% or 30% of that."
In 2024, 35% of cash-out refinance applications were denied, highlighting the demand for shared equity products (SEPs). Many users have low credit scores, and homeowners typically access about 15% of their home value. The market is growing, with major providers originating 54,000 agreements from 2015 to 2025. However, litigation is rising, with lawsuits alleging deceptive practices and high exit costs. As early agreements mature, homeowners are realizing the financial implications of sharing home appreciation, leading to disputes over repayment obligations.
#shared-equity-products #home-equity-investment #regulatory-scrutiny #litigation #homeowner-disputes
Read at www.housingwire.com
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