More than 1,300 Pennsylvania homeowners will have mortgage liens stripped from their properties as part of a settlement with a Florida-based real estate firm accused of using deceptive practices.
Advertisements
Pennsylvania Attorney General Dave Sunday announced the agreement late last week.
The settlement resolves litigation against MV Realty PBC, LLC, its Pennsylvania subsidiary, and executive Amanda Zachman.
The settlement stems from a 2022 lawsuit filed by then-Attorney General Josh Shapiro, which alleged the company misled residents into signing longterm contracts that put mortgage liens on their homes.
Advertisements
Under the terms of the consent petition, which is pending approval in the Philadelphia Court of Common Pleas, MV Realty must waive all existing “Homeowner Benefit Agreements” in the state.
The company is required to record mortgage satisfactions for all impacted properties within 30 days of the agreement’s effective date.
Advertisements
“Pennsylvania homeowners who fell victim to MV Realty’s deceptive sales practices were trapped by the mortgages placed on their homes,” Sunday said in a statement. “This settlement provides impactful relief by eliminating those mortgages and protecting homeowners’ most valuable assets.”
The company’s business model involved offering homeowners a one-time cash payment in exchange for a 40-year exclusive right to list their property for sale.
According to the lawsuit, many homeowners were unaware that the deal resulted in a mortgage lien. Homeowners who tried to exit the agreement were hit with termination fees totaling 3% of the home’s value.
Advertisements
MV Realty will pay $645,595 in restitution to consumers who previously paid early termination fees, along with $7,000 in litigation costs. Payments will be made in installments through March 1, 2027, authorities said.
In addition, the company and its officers are permanently barred from any residential real estate business in Pennsylvania.
Advertisements
The settlement assessed $1.66 million in civil penalties against the company and $50,000 against Zachman, but the fines will be suspended provided the defendants comply with the settlement terms.
Pennsylvania is not the first state to take action against the firm. Massachusetts recently reached a settlement with MV Realty that included a $2.25 million payment and the non-enforcement of $7 million in mortgages.
Advertisements
Impacted Pennsylvania residents do not need to take action to have their mortgages terminated. However, the attorney general’s office is telling consumers who already paid termination fees to file a complaint with the Bureau of Consumer Protection within 60 days to qualify for restitution.
Complaints can be submitted online, by phone at 1-800-441-2555, or via email at consumers@attorneygeneral.gov.
