Maine Governor Janet Mills has signed the nation’s first legislation establishing comprehensive consumer protections against home equity investment (HEI) loans, setting a regulatory precedent for a rapidly growing and controversial segment of the real estate finance market.
The new legislation officially classifies HEI products as “shared appreciation mortgage loans” under state law. The law aims to provide stringent guardrails on financial products that consumer advocates argue have operated in a risky regulatory gray area.
HEI agreements have gained traction nationally by offering homeowners a lump sum of upfront cash with no monthly payments. In exchange, the lender takes a percentage of the home’s future value, which is secured by the p...