Pennsylvania AG sues MV Realty for blindsiding homeowners with 40-year liens

PITTSBURGH — Pennsylvania Attorney General Josh Shapiro has announced a lawsuit against a Florida-based real estate company that has been the center of a Channel 11 News investigation.

Channel 11 Investigatives’ Angie Moreschi reported exclusively in November that MV Reality has been contacting homeowners all over Southwestern PA and offering them quick money now, in exchange for an agreement to use them as their listing agent later, if they decide to sell their property. Many homeowners we talked with said MV Realty did not tell them the contract would last for 40-years or that the company would put a lien on their property to enforce it.

On Wednesday, Shapiro filed suit against the company and its owner, alleging they “misled Pennsylvania consumers regarding the terms of the company’s so-called Homeowner Benefit Program and obtained mortgages on consumers’ homes without their knowledge.” On Nov. 29, the Florida Attorney General also filed suit against the company.

Related coverage: Florida sues realty company and reality-star founder for ‘swindling’ homeowners across U.S.

“Pennsylvania homeowners are falling victim to MV Realty’s calculated deception in hiding the terms of the Homeowner Benefit Program,” Shapiro said in a release. “MV Realty is a scam that exploits Pennsylvanians in vulnerable financial situations, and my Office isn’t buying it. My Office will protect homeowners’ most important asset– the value of their real estate.”

CLICK HERE TO READ THE ENTIRE LAWSUIT

Shapiro’s office said they have heard from homeowners across the state claiming they were ripped off by the company, and are aware of around 1000 mortages that are tied to MV Realty and believe there may be more.

“MV Realty did not represent themselves fairly in their dealings with my wife and me,” said Thomas Halapin, an MV Realty victim just outside of Pittsburgh. “I was unaware a mortgage was placed on my property until a news reporter showed up at my house the following morning. The terms we discussed with MV Realty never mentioned a mortgage and they represented the agreement was for 10 years, not 40.”

The lawsuit asserts that the defendants engaged in unfair and deceptive acts and practices in violation of the Unfair Trade Practices and Consumer Protection Law. The lawsuit requests the court order the defendants to:

• Pay restitution to all people who have suffered losses as a result of the defendants’ conduct
• Strike all mortgages recorded on real estate in Pennsylvania
• Refrain from entering into the Homeowner Benefit Agreement with Pennsylvania consumers
• Pay civil penalties of $1,000 for each violation of the Consumer Protection Law and $3,000 for each violation involving a consumer 60 or older.

Consumers with concerns about contracts they made with MV Realty are strongly encouraged to file a complaint with the Bureau of Consumer Protection online or contact BCP for more information at 1-800-441-2555 or scams@attorneygeneral.gov.

Pennsylvania Homeowners Impacted

11 Investigates discovered that MV Reality has been contacting homeowners all over Southwestern PA and offering them quick money now, in exchange for an agreement to use them as their listing agent later, if they decide to sell their property.

“Free money, that’s how they put it. It was free money to you,” Keith, a Shaler homeowner who asked us not to use his last name, told Channel 11.

Many homeowners we talked with said MV Realty did not tell them the contract would last for 40-years or that the company would put a lien on their property to enforce it.

“I didn’t know there was a lien,” 74-year-old Verona Homeowner Georgette Snowden told us, “I would never had of agreed to that had I known it was a lien.”

The contract and mortgage liens create a 40-year obligation for the homeowner to pay MV Realty 1000′s of dollars. Even if they don’t use the company, the homeowner still must pay 3-percent of the home’s value, as appraised by MV Realty. The only way to avoid it is if the house is not sold for all those decades. It’s also important to note the obligation lives on, even after the homeowner dies. The home can’t be sold, even by heirs, unless the lien with MV Realty is satisfied.

A statement from the company is pasted below:

MV Realty Statement on Pennsylvania Attorney General Filing

“MV Realty has helped more than 30,000 satisfied clients nationwide through our Homeowner Benefit Agreement (HBA) by providing our clients up to $5,000 that can be used to pay their mortgage, utility bills or improve their financial standing. In return, we only ask to be their realtor if they sell their home during the term of our agreement

“We are proud that our team in Pennsylvania consists of local, licensed real estate agents. And when our realtors explain HBAs to clients, they always work in a transparent dialogue to ensure that each client understands the terms of the agreement.

“New and innovative business models, like the HBA, can transform established industries and can sometimes draw questions from critics or outright hostility from those whose existing business model is threatened. However, to suggest that MV Realty has engaged in unfair or deceptive practices is simply false.

“After a full airing of the facts, we are confident that the conclusion will be that MV Realty’s business transactions are in full compliance with Pennsylvania law. As this process moves forward, we remain fully committed to working with Pennsylvania policymakers, including the Attorney General, to discuss appropriate regulations and oversight for the new and emerging business.”

- MV Realty spokesperson

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Homeowners Blindsided: ‘Free Money’ trap

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