Massachusetts Attorney General sues MV Realty company after I-Team investigation
BOSTON - The Massachusetts Attorney General has filed a lawsuit against Florida-based MV Realty. The lawsuit claims the company uses unfair and deceptive tactics to scam financially struggling homeowners.
The complaint alleges MV Realty deceived homeowners into entering "abusive contracts." It also claims the business model and agreement terms "are unconscionable targeting elderly and financially vulnerable homeowners who are short on cash."
The WBZ-TV I-Team first told you about MV Realty back in February when Rutland homeowner Crystal Doe told us she had to pay two real estate commissions because she unknowingly signed a contract called a homeowner benefit agreement with MV Realty to sell her home. The company gave the Does a small amount of cash in exchange for the right to list their home for sale. A few weeks later the family decided not to sell and forgot all about the agreement.
Crystal said she had no idea the agreement was for 40-years and included a mortgage lien on her home, so that whenever it sold, no matter who sold it, MV Realty would be entitled to a commission. When the family did finally decide to sell the home, Crystal hired another realtor and had to pay two separate commissions on the property. It cost her more than $17,000.
Learning about the lawsuit, Crystal says she feels deceived and wants her money back. Her attorney Jordana Greenman, who brought Crystal's story to the I-Team, says the agreements are outrageous and is happy to see that they could be coming to an end.
After learning of Crystal's story, the I-Team then spent months digging through documents at the Registries of Deeds. We found nearly 100 other homeowners with mortgage liens on their property from MV Realty and began knocking on doors, discovering folks had no idea that they had signed the 40-year agreements or that they were responsible to pay a commission to MV Realty when the property got sold.
One Malden homeowner told us, "I'm 60 years old, I won't be here in 40 years."
The civil complaint alleges MV Realty not only violated 93A consumer protections but also engaged in the unlicensed practice of law. It seeks restitution for homeowners, rescission of the contracts, release of the mortgages and civil penalties. The Attorney General is also requesting a temporary restraining order and preliminary injunction to ban MV Realty from offering these deceptive contracts to consumers in Massachusetts.
"MV Realty's business model and contract terms are unconscionable, targeting elderly and financially vulnerable homeowners who are short on cash, only to leave them with agreements they don't understand and can't get out of," Attorney General Maura Healey said in a statement Wednesday. "We are suing to get homeowners out of these contracts, protect our residents from this scheme, and stop this predatory company from doing any more business here in Massachusetts."
An MV Realty spokesperson sent this statement to the I-Team Wednesday:
"MV Realty has helped more than 30,000 satisfied clients nationwide through our Homeowner Benefit Agreement (HBA) by providing up to $5,000 that can be used to pay their mortgage, utility bills or improve their financial standing. We are proud that our team in Massachusetts is built on local, licensed real estate agents who have developed client relationships with over 550 households across the Commonwealth.
"New business models that bring innovations to any longtime industry, like the real estate establishment, can sometimes draw questions. That's why we've been engaged in a transparent dialogue with the Attorney General's office for the last several months and why it's disappointing that they took this action.
"We are confident that after a full airing of the facts, the conclusion will be that MV Realty's business transactions are legal and ethical and that our team has operated in full compliance with Commonwealth law. As this process moves forward, we remain fully committed to working with Massachusetts policymakers, including the Attorney General, to regulate these transactions."
