When an Option is a Reverse Mortgage

​Olson v. Unison Agreement Corp. (9th Cir. Aug. 7, 2025, No. 23-2835) 2025 U.S. App. LEXIS 19947

​The Ninth Circuit Court of Appeals, in a case arising out of the state of Washington, ruled that the plaintiffs had stated a cause of action for violation of Washington’s reverse mortgage law.

​The transaction involved an advance of funds by Unison to the Olson’s, with Unison having a future option to purchase. The obligation was secured by a note and deed of trust and was marketed as having no monthly payment and no interest. The Court concluded that the details of the structure of the overall arrangement, which included a formal option as one component, effectively created the substance of a shared-appreciation reverse mortgage. In doing so, Unison's agreement with the Olson’s sufficiently gave rise to a "credit obligation" that fell within the Washington statute.