Florida-based MV Realty must stop making mortgages in Massachusetts as part of a preliminary injunction granted last week by Suffolk Superior Court.
The preliminary injunction was granted in response to a lawsuit filed by the Massachusetts Attorney General’s office against MV Realty in December. The lawsuit alleges that MV Realty, which does business in the state as MV of Massachusetts, presents itself as a real estate brokerage but instead offers a loan product.
In addition to prohibiting the company from obtaining or recording mortgages in Massachusetts while the lawsuit is ongoing, the preliminary injunction also restricts MV Realty from engaging in unfair and deceptive marketing practices and requires the company to release existing mortgages.
“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,” Attorney General Andrea Campbell said in a statement last week. “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.”
The lawsuit involves a product that MV Realty calls a “Homeowner Benefit Agreement.” The product offers a cash payment up to $5,000 in exchange for a 40-year commitment to let MV Realty act as the listing brokerage when the homeowner decides to sell. The Massachusetts attorney general’s office said the cash payments were typically less than $1,500.
The attorney general’s office alleged that the product was effectively a loan and that MV Realty used “unfair and deceptive marketing and sales tactics” to hide the true terms of the contract.
The lawsuit also alleged that MV Realty used illegal methods to secure its rights under the contracts, including mortgaging homeowners’ properties, which the attorney general’s office said violates Massachusetts laws.
MV Realty allegedly targeted consumers searching for information on small loans or public benefits with advertisements implying that its product was a government program, promotion or giveaway, the statement said. Once MV Realty obtained a lead, salespeople allegedly barraged homeowners with phone calls, texts and emails to secure a deal and then allegedly took steps to ensure homeowners did not read through or understand the contracts, the statement said. These steps included not providing documents in advance for consumers to read, printing documents in size 8.5-point font, not leaving copies after consumers signed the contract and sending mobile notaries who did not know about the product to get homeowners to sign the contract, according to the statement.
“MV Realty customers are unaware of the core terms of the transaction and are unwittingly saddled with a mortgage on their home, tying up what is most likely their most valuable asset, restricting their ability to refinance and preventing them from selling without paying a tenfold penalty to MV Realty,” the statement said.
