‘First of its kind’: NC sues real estate firm over accusations of ‘predatory’ lending

A Florida-based realty company that operates locally is being sued by the state of North Carolina as a “predatory lender.”

N.C. Attorney General Josh Stein filed a lawsuit this week against real estate brokerage firm MV Realty and the company’s leaders.

The complaint alleges the company, which has operated in North Carolina since August 2020, uses “unfair and deceptive practices” through its “Homeowner Benefit Agreement” (HBA) program, luring homeowners in need of cash using “abusive” online ads, robocalls, and texts. It also alleges the company tricks homeowners into signing exclusive, 40-year real estate agreements with misleading incentives — often locking homeowners into contracts that even survive their deaths.

If homeowners attempt to back out, the lawsuit alleges MV Realty records a lien on each homeowner’s property to ensure that it will be able to collect its penalty, “often preventing them from accessing the equity in their homes or even transferring the property to a spouse or heir.”

The state estimates the company has signed up “more than 2,100 North Carolinians” for its program.

“MV Realty is preying on vulnerable people, and my office is taking them to court to put them out of business,” Stein said in a news release.

The N&O’s media partner, ABC11, and its Troubleshooter reporter, Diane Wilson, first investigated MV Realty and its practices last year.

Nazneen Ahmed, a spokesperson for Stein’s office, told The N&O that the agency has had a “handful of litigation” related to real estate matters over the past few years, but this case is the “first of its kind.”

The lawsuit follows more than 20 complaints received from people about MV Realty’s unfair and allegedly unlawful practices, Ahmed said.

A spokesperson for MV Realty, who declined to be named, said the company has “voluntarily and temporarily” paused entering into any new agreements. However, it remains “confident” that its benefit program fully complies with the law.

“We hope to work with policy makers in North Carolina to address concerns and continue this valuable program as an option to homeowners across the state,” the spokesperson said in an email.

Stein, a Democratic candidate for governor, said the state is seeking injunctions as well as restitution for consumers and other monetary penalties.

On Thursday, a bipartisan group of members of the General Assembly introduced legislation they said would protect North Carolina homeowners from predatory, long-term real estate agreements.

The Unfair Real Estate Agreements Act is sponsored in the House by Reps. Kyle Hall, Charles Miller, Hugh Blackwell and Vernetta Alston, and in the Senate by Sens. Joyce Krawiec, Brad Overcash and Paul Lowe.

Stein applauded the move.

“We need a law to make sure that other companies can’t copy [MV Realty’s] fraudulent playbook,” he said.

Stein’s office invited people who think they have been treated illegally by MV Realty to file a consumer complaint at www.ncdoj.gov/complaint or 1-877-5-NO-SCAM.