Massachusetts judge blocks Florida financial company from doing business in Commonwealth
A Massachusetts Superior Court judge ordered a controversial Florida-based financial company to stop doing business in the Commonwealth.
Judge Kenneth W. Salinger granted a motion for a preliminary injunction against embattled MV Realty, which has come under fire in recent months from federal and state regulators. The Mass. Attorney General’s Office Consumer Protection Division filed suit against MV Realty in December, accusing the company of targeting hundreds of elderly and low-income homeowners using “deceptive and unfair sales tactics.”
Salinger’s order prevents MV Realty from marketing to homeowners, collecting undisclosed fees, obtaining or recording additional mortgages and enforcing existing mortgages in Massachusetts.
25 Investigates first reported on MV Realty’s business practices in November. The company markets a product called a “Homeowner Benefit Agreement” that, according to investigators, offers a small cash payment averaging $1,150 in exchange for a 40-year exclusive right for MV Realty to act as the listing brokerage when the homeowner decides to sell. Investigators said under the terms of the contract, the company can collect payments of at least 10 times the amount advanced “with virtually any title transfer or other service provided to the homeowner—not just when the home is sold.”
At least 400 Massachusetts homeowners signed contracts with MV Realty. The AG’s office is seeking restitution for consumers, rescission of the contracts, release of the mortgages, and civil penalties. Attorneys general in Pennsylvania and Florida have filed similar lawsuits against the company.
“The Court finds that the Commonwealth is likely to succeed in proving that MV [Realty] has engaged in a pattern of unfair and deceptive conduct…by tricking homeowners into thinking they would never have to repay the amounts that MV [Realty] advanced to them and that they would owe no interest to MV [Realty], hiding the fact that MV [Realty] would record a mortgage on the borrower’s property with a statutory power of sale, falsely representing that MV [Realty] would serve as their agent in selling their home when MV [Realty] never had any intent of doing so,” Salinger wrote in the Feb. 21 order.
An MV Realty spokesperson said the company has suspended its Homeowner Benefit Agreement program.
“MV Realty has voluntarily temporarily suspended entering into new customers contracts as we work to address the concerns raised by regulators and legislators. The Company remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent,” the spokesperson said.
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