Does paying mortgage give you equitable interest?

[Curtis H.]

Not sure what forum this goes in but I have an interesting question. This doesn't involve me, but a childhood friend. I'm not sure what to tell him. Here is the scenario as simply as I can put it.

* Used family member's credit to get into a house roughly 10 years ago. House is in the family member's name. Mortgage is in the family member's name. I think you know where this is going...

* Friend put up down payment money, pays half the property tax, and ALL of the mortgage payment every month on time for 10 years. 

* Family member uses the tax savings by writing off the interest and using the money to pay the other half of the yearly taxes

* There was no written agreement in place for the 10 years my friend was living in the house and paying the mortgage directly to the lender under his name. There was a verbal agreement there were witnesses for that the family member wanted NOTHING in return for using their credit. It was a favor. Asked about it a few years later, family member re-iterated everything was all good and since they make payments on time every month, it actually helps them, not hurts them. 

* Fast forward to today, there is $500K equity in the house (Bay Area) and the family member has gone Tony Montana on my friend. Made them sign a tenant and landlord agreement 6 months ago and basically said they want $300K in equity and will give the rest to my friend. End of story. No negotiation. They have put less than $40K into this house total, where my friend has put in almost half a million. Yet the family member wants over half the equity. This family member was the closest thing to Mother Theresa I had ever seen previous to this incident. Everyone is floored, but half a million can make anyone go nuts apparently. 

Is my friend screwed if this goes to court? Not much he can do now as everything is in the family member's name. 

Thanks!