FL Loan Company Duped MA Homeowners, AG Charges

BOSTON, MA — A realty company is being sued on allegations that it used deceptive marketing practices and financially exploited hundreds of homeowners, according to a statement from Massachusetts Attorney General Andrea Joy Campbell.

MV Realty, a Florida-based company, "deceptively presents itself as a real estate brokerage, while, in actuality, aggressively marketing a deceptive loan product to financially struggling homeowners in Massachusetts," according to Campbell's statement.

A preliminary injunction was granted by Suffolk Superior Court on Monday, prohibiting the company from obtaining additional mortgages and requiring it to release existing mortgages.

Massachusetts joins several other states suing MV Realty, including Pennsylvania, Florida, and Ohio, according to WPXI, an Ohio TV station.

The company sells a product called a “Homeowner Benefit Agreement” that offers small-dollar cash payments, typically less than $1,500, in exchange for a 40-year exclusive right for the company to act as the listing brokerage when the homeowner decides to sell, according to prosecutors.

The contract also requires the homeowner to pay MV Realty on virtually any other transfer of the home like a death or foreclosure. Campbell's office alleges that MV Realty hides the true terms of the contract, which effectively amounts to a loan.

Prosecutors allege that MV Realty used illegal methods for securing its rights under the contracts, including mortgaging homeowners’ properties in violation of state law.

“MV Realty has used malicious marketing practices to prey on, lie to and financially exploit hundreds of homeowners across Massachusetts, stripping home equity from cash-strapped consumers,” Campbell said in a statement. “This preliminary injunction will stop MV Realty from further harming our residents and serves as a model for attorneys general offices across the country to fight back against these kinds of predatory practices.”

Prosecutors also allege that MV Realty customers were unaware of the core terms of the transaction and unwittingly saddled with a mortgage on their home, restricting their ability to refinance and preventing them from selling without paying a tenfold penalty to MV Realty.

Terms buried in the contract include a clause that allows MV Realty to assign the right to be the homeowner’s broker to anybody it wants to; a clause ensuring a minimum payment to MV Realty; a clause requiring tenfold repayment of the cash advance if the owner loses the home to foreclosure; and a clause that says that MV Realty will only act as a non-agent facilitator, who does not owe homeowners the duty of loyalty or duty of confidentiality that real estate agents generally do, according to prosecutors.