Important Disclosures
Important information about Home Equity Agreements and our services.
California State Disclosure
CALIFORNIA ADDENDUM RE BROKER DISCLOSURE: Barastone, Inc., CA RE Broker License No. 02041750. Role: Barastone, Inc. is the licensed California real estate corporation and the named counterparty on the Home Equity Agreement; the program is offered in California under that licence. Mend Solutions, Inc. is the brand under which the program is marketed and holds no California real estate or lending licence of its own. CFL / CRMLA: Barastone, Inc. is operating under confirmed exemption per CA-licensed legal counsel. DFPI REGISTRATION: Barastone, Inc. has confirmed non-covered-person status per CA-licensed legal counsel. Contact CA DRE at (877) 373-4542 or dre.ca.gov, or CA DFPI at (866) 275-2677 or dfpi.ca.gov.
About Home Equity Agreements
Important: Mend makes an upfront payment to you in exchange for a contractual right to a percentage of your home's value at settlement, calculated using the Settlement Multiplier in your Agreement. The amount you owe depends on your home's value when you settle, not the original amount received.
How This Differs From a Loan
A Home Equity Agreement differs from traditional home equity loans or lines of credit in several important ways:
- There are no monthly principal or interest payments
- The cost is a Settlement Multiplier applied to your home's value at settlement, not a rate applied to a balance
- You share in your home's future value changes
- Settlement is required upon certain triggering events
- The total amount you owe depends on your home's future value
How Settlement Works
At settlement, Mend receives an agreed-upon percentage of your home's total value at that time. If your home has increased in value, you pay more; if it has decreased, you pay less. The exact percentage (Value Share) will be specified in your investment agreement.
Settlement Triggers
Settlement of your Home Equity Agreement is required when:
- You sell your home
- You refinance your mortgage
- You choose to buy out the investment early
- The term of the investment ends (typically 10 years)
- Certain default events occur as specified in your agreement
Risks to Consider
Home Value Risk
Because the settlement amount is a percentage of your home's total value at that time, a significant increase in your home's value means you will owe more. In markets with rapid appreciation, the total settlement amount could be substantially higher than the original investment you received. Conversely, if your home decreases in value, your settlement amount is reduced proportionally.
Reduced Home Equity
A Home Equity Agreement reduces the amount of equity you have available in your home. This may affect your ability to borrow against your home in the future or the proceeds you receive if you sell.
Settlement Obligation
At the end of the term or upon a triggering event, you must settle the investment. If you cannot sell or refinance your home, you may need to find other sources of funds to satisfy the settlement obligation.
Costs and Fees
A Home Equity Agreement involves the following costs:
- Transaction Fee: 4.5% of the investment amount, deducted from your proceeds at closing
- Third-party closing costs: title, escrow, recording and appraisal, averaging $2,215 and deducted from your proceeds separately from the Transaction Fee. A real file's third-party costs vary.
- Value Share: The percentage of future value you share with Mend (varies by investment)
Homeowner Obligations
As a participant in a Home Equity Agreement, you are required to:
- Maintain the property in good condition
- Keep current on property taxes
- Maintain adequate homeowners insurance
- Not take on additional debt secured by the property without approval
- Notify Mend of any material changes to the property
- Allow property inspections as specified in your agreement
Tax Considerations
The tax treatment of Home Equity Agreements may differ from traditional home equity products. Funds received from an HEA are generally not considered taxable income, but the value share paid at settlement may have tax implications. We strongly recommend consulting with a qualified tax professional to understand the tax implications for your specific situation.
No Guarantee of Approval
The information on our website is for educational purposes only and does not constitute an offer or commitment to provide a Home Equity Agreement. All investments are subject to property appraisal, verification, and underwriting approval. We reserve the right to decline applications that do not meet our investment criteria.
Website Estimates
Any estimates, scenarios, or examples provided on our website are for illustrative purposes only. Actual terms, investment amounts, value share percentages, and outcomes will vary based on individual circumstances and may differ materially from any estimates provided. You will receive specific terms and disclosures before signing any investment agreement.
Equal Housing Opportunity
Mend is an Equal Housing Opportunity provider. We do not discriminate on the basis of race, color, religion, national origin, sex, familial status, disability, or any other protected class.
Seek Independent Advice
A Home Equity Agreement is a significant financial decision. We encourage you to consult with a financial advisor, attorney, or other qualified professional before entering into any investment agreement. You should carefully review all terms and disclosures and ensure you understand your obligations before signing.
Contact Us
If you have questions about these disclosures or our services:
Mend Solutions, Inc.
Phone: (877) 799-2519
Email: support@mend-solutions.com
Hours: Monday - Friday, 8am - 6pm PT