"We're now the first provider to offer home equity agreements in several of these states, and we have plans to expand into additional markets soon," Unlock CEO Jim Riccitelli said in a press release. A Series B capital raise in 2024 helped fuel the company's expansion strategy this year, he noted.

Since its founding in 2019, the company has received venture capital funding from several firms, including Second Century Ventures, Saluda Grade and D2 Asset Management, according to Crunchbase. Earlier this summer, D2 and Unlock struck another $250 million agreement that guarantees the purchase of the latter's originations, doubling the investment the asset management firm made last year. 

The latest news arrives as Unlock also reported year-over-year growth of 55% in both the total number of newly originated home equity agreements and dollar volume issued. 

Unlock boosts marketing leadership

Alongside the company's expansion, Unlock also welcomed marketing executive Miren Desai to serve as chief growth officer, a newly created position at the company. Previously, Desai held similar leadership roles at fintechs Lendingclub, Nextdoor and Funding Circle, as well as at Mastercard. 

In the role, Desai will work closely with Unlock's sales and product divisions to open up the client base for its services. 

"I'm excited to help take Jim's vision to the next level and support strategic, sustainable growth that remains focused on the homeowner experience and solving their financial needs," he said. "I believe we can make an equity-based finance solution just as commonplace for homeowners as it is for businesses. 

HEI products face legal challenges

The rising wave of attention being paid to home equity agreements offered by Unlock and similar companies comes amid a backdrop of legal scrutiny in the segment. 

At least three current lawsuits filed against Unlock or its peers are making their way through courts across the country. Now-defunct rival Easyknock abruptly shut its doors at the end of 2024 as it faced legal enforcement in several states after customers suffered severe financial consequences with its products. 

HEIs offer homeowners, some of whom may struggle to qualify for traditional equity lines of credit or loans, access to a cash share of their property's value for a fixed term, generally with no monthly payments required. Full repayment of an agreed-upon share, including any appreciated value, becomes due at the end of the term. 

Plaintiffs in these lawsuits argue they were not aware of some of the potential penalties or consequences, including foreclosure, if they were unable to pay amounts due. Consumer advocacy groups have also alleged companies are employing misleading marketing tactics and urged regulators to classify them as mortgage loans, which would require HEI providers to make the same disclosures lenders do.   

Leading companies within the segment have said they want to work with regulators to put in place appropriate guardrails that would protect consumers.  

Legal controversies aside, shared equity providers are seeing the wind at their backs currently after a leap in accrued equity levels for U.S. homeowners this decade. Elevated interest rates, when compared to earlier this decade, also provides little incentive for a traditional refinance, opening the door for homeowners to look at using alternative methods to tap into equity.