Lawsuit Investigation: Does MV Realty Scam Homeowners and File Illegal Liens on Their Properties?

Attorneys working with ClassAction.org want to hear from anyone who entered into a listing agreement with MV Realty while living in New York or Ohio.

Specifically, they’re looking into whether the real estate agency misleads consumers regarding the terms of its Homeowner Benefit Program – an agreement whereby MV Realty pays a homeowner several hundred dollars to sign a 40-year contract stating the homeowner will use the company as their exclusive listing agent if they sell their property.

 The program has already come under scrutiny by several states’ attorneys general, who have accused MV Realty of operating a real estate scam and not properly disclosing that a lien would be filed against a homeowner’s property if they signed the agreement.

The attorneys working with ClassAction.org are now looking to speak with homeowners as they work to determine whether a class action lawsuit can be filed against MV Realty. A lawsuit could potentially help consumers get back money they may have been improperly charged and possibly get them out of their contracts with the company.

MV Realty Homeowner Agreements: Legit or a Scam?

MV Realty’s Homeowner Benefit Program is advertised as a way to “get cash today” while “build[ing] a relationship for the future.” Homeowners who sign a contract with MV Realty are paid a percentage of the estimated value of their home – from several hundred dollars up to $5,000 – in exchange for a 40-year agreement that, should they ever decide to sell their home, they will use MV Realty as their exclusive listing agent. MV Realty represents that the agreement is not a loan and that the company does not file a lien on the homeowner’s property. According to the company’s website, a memorandum – or, in some states, a mortgage – is filed to serve public notice of the homeowner’s obligation under the contract.

While MV Realty represents itself as a legitimate real estate company, the firm has been accused by several states’ attorneys general of misleading consumers about its Homeowner Benefit Program and using “illegal methods,” such as filing a lien, to secure its rights under the contracts.

Lawsuits Take Issue with Sales Tactics, Liens

The attorneys general of Massachusetts, Pennsylvania, Florida and Ohio have each sued MV Realty over allegations that the company has violated consumer protection laws by using deceptive sales tactics to essentially scam homeowners into signing its Homeowner Benefit Agreements.

The Massachusetts lawsuit alleges that MV Realty uses “unfair and deceptive marketing” to obscure “the true terms of the contract” – which, contrary to the company’s representations, is really a loan. According to the case, if a homeowner breaches the terms of the agreement by transferring ownership of the home without using MV Realty as a listing agent – including through situations such as foreclosure or divorce – MV Realty charges an “early termination fee” that amounts to at least 10 times the amount the homeowner was initially paid. Per the lawsuit, the contract is essentially a “usurious financial instrument” offered by a lender “masquerading as a real estate brokerage firm.”

The Pennsylvania lawsuit similarly takes issue with MV Realty’s sales practices, claiming homeowners are never given an opportunity to review the terms of the agreement before signing it and that the most notable terms – such as the fact that a mortgage lien will be filed on the property – are buried “in the fine print.”

The Florida lawsuit also argues that MV Realty’s agreement has been interpreted as a lien, which, unbeknownst to homeowners, limits their ability to refinance or take out home equity lines of credit. The lawsuit also claims that MV Realty has essentially preyed on “vulnerable” homeowners, including senior citizens and people who speak English as a second language, and pressured them to sign the agreements without fully understanding the terms.

The Ohio lawsuit says MV Realty’s agreements are “confusing and contrary to law” and accuses the firm of illegally practicing real estate in Ohio.

MV Realty’s practices also captured the attention of several U.S. senators who, in a letter asking the Consumer Financial Protection Bureau and the Federal Trade Commission to investigate, claimed the firm is disguising its product as a “loan alternative” to skirt lending laws while essentially charging homeowners excessive interest rates.

The Massachusetts attorney general’s office announced on March 3 that the judge overseeing its lawsuit found that the Commonwealth was “likely to succeed” in proving its allegations and ordered MV Realty to stop recording additional mortgages and release existing mortgages in Massachusetts while the litigation is proceeding.

Online Complaints About MV Realty

Homeowners have posted complaints online about MV Realty’s practices and the Homeowner Benefit Agreement. Some consumers described the agreement as a scam and claimed to have been misled about how much they would be required to pay MV Realty. Others said they were never told the company would file a lien on their property. Several homeowners also mentioned that MV Realty’s agreement prevented them from refinancing – a complication they say was never disclosed when they signed the contract.

Below is a sampling of online complaints [sic throughout]:

My wife and I are disabled and we feel as though they are profiting off of our disabilities! My wife signed the contract and she has brain damage! Contract was signed without my knowledge. We were taken advantage of!”
— Larry C., 02/24/23, BBB.org

Terrible service and response buyer beware. We own our home and wanted to do a simple cash out. Regardless of what they may say, the membership is a lien and considered a cloud over any loan consideration.”
— Kevin B., 02/14/23, BBB.org

I was contacted after seeking a loan and thought this was some type of loan. Never was o advised that if I was to sell my property MV Realty had exclusive rights for 40 years. This is a huge scam and I want out if this agreement. The person I talked to made it seem so simple even after being asked was my home being high jacked he said no way. He lied and this company is crooked!”
— Archelaus L., 12/27/22, BBB.org

Complete and total scam of a company. They give you a cash payment up front in exchange for 6% of the sale of your home when you choose to sell. What they leave out during the all around lack of communication is that it’s a 40 year contract + a lien being on your home. Do not trust this company.”
— Jason C., 10/08/22, BBB.org

They called offering us $690 to sell our house, back in September 2021. We asked many times and they said we’d only pay back the money they paid us. We decided to sell our house to opendoor June, forgetting we used them. I was then contacted by a lawyer that stated due to me selling my home I needed to pay them. When I stated OK so $690, she replied in a smug umm no that’s going to be $9,747 and we’re putting a lien on your house. They have never performed any work for us at all. When you reach out to them they never respond and now they get that much money for doing nothing. But they’ll throw a lawsuit at you when you do anything. This company is a scam on homeowners and they do not explain anything in the contract to people who do not speak realtor or lawyer.”
— Megan W., 07/06/22, BBB.org

SCAM[]!!! They give you $800 and then put a lien on your home for $8,000!!! If you ever try and refinance you have to pay them $8,000. They tell you can subordinate but no bank will accept the dead restrictions they put on. Don’t do it!!”
— Joseph R., 08/22/22, Yelp.com

How a Lawsuit Could Help

A class action lawsuit, if filed and successful, could help homeowners get back money they may have been unlawfully charged by MV Realty. It could also potentially end consumers’ agreements with MV Realty and force the company to change its marketing or business practices.

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