Home Equity Agreements
Johnsen v. Unlock Partnership Solutions Inc.
Date: Oct. 1, 2026
Issue: Whether Unlock’s home equity agreements qualify as residential mortgage loans and violate federal and Colorado lending laws by concealing borrowing costs, charging excessive interest, and imposing unfair contract terms.
Case Summary: Colorado homeowner Sheila Johnsen filed a class action against Unlock Partnership Solutions, Unlock Technologies, Wilmington Savings Fund Society, and U.S. Bank Trust National Association, alleging that they disguised mortgage loans as home equity agreements to evade lending laws, charge excessive interest, and impose unfair contract terms.
Johnsen is represented by Halperin Petersen & Mikkilineni LLP, a law firm founded in July 2026 by three former Consumer Financial Protection Bureau (CFPB) enforcement officials, including Eric Halperin, who led the agency’s enforcement division under the Biden administration. The case marks the firm’s first lawsuit and follows earlier CFPB warnings about the risks of home equity agreements.
Johnsen alleged that Unlock Partnership Solutions and Unlock Technologies (collectively, Unlock) marketed their home equity agreements (HEAs) as alternatives to traditional mortgages to avoid federal and state lending laws. According to the complaint, Unlock offered homeowners cash advances secured by deeds of trust on their homes and required repayment within 10 years. Johnsen argued that these agreements function as residential mortgage loans and should comply with laws requiring clear disclosures, limits on interest rates, lender licensing, and assessments of borrowers’ ability to repay. She also claimed that Unlock used contracts spanning nearly 100 pages to hide the true cost of its HEAs while advertising them as products without interest charges or monthly payments.
Johnsen further alleged that Unlock imposed excessive costs and unfair contract terms that placed most financial risks on homeowners. Under the agreements, Unlock could receive twice the percentage of a home’s value that it initially advanced, allowing it to collect large returns even if property values declined. Johnsen also claimed that Unlock’s 19.9% annualized cost limit understated the true cost of borrowing and exceeded Colorado’s interest rate cap for unsupervised loans. In addition, Unlock required homeowners to cover property taxes, insurance, maintenance, and other fees while reserving the right to increase repayment amounts for defaults or property damage. Johnsen argued that these practices threatened homeowners with growing debt, loss of home equity, and possible forced home sales.
Johnsen brought 13 claims against Unlock and its co-defendants, alleging that they violated the federal Truth in Lending Act, Colorado Uniform Consumer Credit Code, and other state lending and consumer protection laws. She claimed that Unlock imposed unfair contract terms, hid borrowing costs, misled homeowners about interest rates and repayment terms, and issued mortgage loans without proper licenses. Johnsen also alleged that Unlock failed to provide required loan disclosures, assess borrowers’ ability to repay, and inform homeowners of their right to cancel certain transactions. Alternatively, she argued that Unlock’s agreements qualified as reverse mortgages and violated Colorado’s disclosure and borrower counseling requirements.
Johnsen asked the court to cancel or invalidate Unlock’s agreements and order the defendants to repay unlawful interest and fees. She also sought class certification, damages, statutory penalties, attorney’s fees, litigation costs, and other relief.
Bottom Line: Johnsen seeks to hold Unlock and its co-defendants liable for allegedly violating federal and Colorado lending laws and to recover damages, cancel unlawful agreements, and protect homeowners from excessive interest and unfair contract terms.
Document: Complaint
