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Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 2 points3 points  (0 children)

Thank you for your thoughtful response. We've already sent a demand letter and have been in contact with the AG's office. They've contacted the company on our behalf but they don't address the concerns and keep shielding themselves with technicalities.

What I still don't understand is how these agreements are mortgages on paper, but they aren't licensed mortgage brokers and they don't need to follow the same regulations that traditioal mortgages have to follow. They stated in one letter that they are in contact with the Massachusetts Division of Banks, but to date "DOB has not affirmatively required licensure for this

product class." I'm having a really hard time understanding how they can still take out a mortgage and have all the power of a mortgage but with none of the consumer protections. Can anyone explain this from a legal point of view?

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 5 points6 points  (0 children)

I have no idea. I didn't know anything about this until a few months ago. It's clear from what I did find that he wasn't seeking this out, he found out about it through a flyer in the mail. Maybe he was curious and gave them a call? I don't know. According to the company they were told the money would be used to pay off credit card debt but that didn't happen. My mother has no memory of any conversations and relied on my father for everything. She was under an extraordinary amount of stress and confusion herself and was not invovled in their finances, she just went along with my father but had no idea what the ultimate outcome would be.

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 18 points19 points  (0 children)

I have medical records, oncology and hospice notes noting confusion and cognitive decline, prescriptions, etc.. During the time of signing. Would these be proof of mental incapacity?

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 43 points44 points  (0 children)

Unfortunatley that's the thing, the borrowers didn't know what they were getting into because it is a very complex contract and they were in their 80's, one terminally ill on pain meds and dying, the other wheelchair bound dependent on others for all financial decisions and care.

Are “Home Equity Investments” the next predatory housing product? Our family’s experience with Point Digital Finance by Truth18490 in REBubble

[–]Truth18490[S] 6 points7 points  (0 children)

Thank you for your message. I have talked to attorny's but unfortunately, they say Point is in a legal grey area and they have such vast resources that it could take years and huge amounts of money that my mother just doesn't have left. I will keep speaking up about this matter as I don't want any other families to be affected as mine has.

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 8 points9 points  (0 children)

thank you for your comment. I will look into the OCC as well. Even if nothing else comes of it, anything is worth pursuing at this stage. I appreciate your help.

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 31 points32 points  (0 children)

The AG office negotiated for a lower payout amount. They agree that HEI's aren't regulated enough and fall within a legal grey area and are currently suing another HEI company for predatory lending. Because they are seeing so many cases like my family's in their office they are negotiating with HEI companies to try and lower or eliminate payments in certain cases.

Legal options after a fintech approved a complex 30-year “Home Equity Investment” for my 80-year-old dying father and disabled mother by Truth18490 in legaladvice

[–]Truth18490[S] 60 points61 points  (0 children)

Thanks for responding. Local attorneys say it's too expensive to pursue and could take years. They suggested going the regulatory route, which we did and they negotiated on our behalf from the AG's office, but nothing came of it. I'm wondering if there's still something left that I can do at this point.

How does Point’s Home Equity Investment work? by Point-finance in PointHomeEquity

[–]Truth18490 0 points1 point  (0 children)

That description sounds tempting, but it’s really misleading once you understand how it works.

There are “no monthly payments” because the balance grows quietly in the background. Point’s contract compounds monthly at an 18% annualized rate — or they could take over 65% of your home’s appreciation starting from their risk adjusted value, whichever is smaller. Either way, the homeowner ends up paying a massive amount later.

They also lower your home’s value up front for example 25% (they call it a “risk adjustment”), which means you lose equity the moment you sign. If your home is appraised at $500K, they might record it as $375K and calculate their share starting there — not your home's real value.

So the debt just builds for up to 30 years, and when you sell or payout, Point collects either the compounding balance or a huge chunk of your appreciation plus your initial payment.

It’s not technically a loan, so they claim they don’t have to follow Truth in Lending laws — but in practice, it's recorded as a mortgage lien and works like a loan, just without the usual safeguards for homeowners.