I-TEAM: Senators call on consumer agencies to investigate exclusive real estate listing agreements

A Florida-based company that’s signed tens of thousands of U.S. homeowners to 40-year real estate listing contracts in exchange for quick cash is facing new scrutiny from members of Congress.

On Wednesday, the chairmen of the Senate Finance Committee and Senate Banking, Housing & Urban Affairs Committee sent a letter to the Federal Trade Commission and Consumer Financial Protection Bureau calling on the agencies to investigate the practice of exclusive real estate listing agreements.

The letter specifically references MV Realty and a series of investigative reports from Cox Media Group-owned television stations, which began reporting on the company in Orlando and Atlanta back in 2021.

In November, the stations featured homeowners who regretted signing contracts with the company in Atlanta, Boston, Charlotte, Dayton, Jacksonville, Orlando, Pittsburgh, and Seattle - as well as a former company employee who said MV Realty used misleading and high-pressure sales tactics to target elderly and less sophisticated homeowners. The investigative teams collectively documented more than 12,000 properties in seven states with liens attached by MV Realty to document their contracts with homeowners.

“Recent reporting raises serious concerns about potentially predatory and coercive practices by real estate firms, like MV Realty, and several state attorneys general are taking action,” wrote the senators, citing a news story from WHIO-TV in Dayton, Ohio.

“I want to look more into it. Based on the report that Cox [Media Group] is doing, it’s essential,” said Senator Sherrod Brown (Ohio) in a previous interview with WHIO-TV. “When I see people taking advantage of homeowners or renters, we spring into action. And in cases like this, this is probably a prime area.”

In November, Florida’s attorney general filed a lawsuit against MV Realty, calling the company’s homeowner benefit program a deceptive scheme to swindle customers out of their home equity.

“For a company to prey on unsuspecting homeowners in a way that locks them into a 40-year obligation designed to siphon away equity from the property is disgraceful,” said Florida Attorney General Ashley Moody.

Last week, attorneys general in Pennsylvania and Massachusetts also filed lawsuits against the company.

“MV Realty is a scam that exploits Pennsylvanians in vulnerable financial situations, and my Office isn’t buying it. My Office will protect homeowners’ most important asset– the value of their real estate,” said Pennsylvania Attorney General Josh Shapiro.

His news release included a Pittsburgh-area resident who was interviewed by CMG station WPXI-TV during the original investigation.

“MV Realty did not represent themselves fairly in their dealings with my wife and me,” said Thomas Halapin. “I was unaware a mortgage was placed on my property until a news reporter showed up at my house the following morning. The terms we discussed with MV Realty never mentioned a mortgage, and they represented the agreement was for 10 years, not 40.”

Attorneys general in Georgia and North Carolina also confirmed they are investigating the company. A Washington state legislator recently held a hearing and drafted legislation aimed at curtailing the company’s business practices.

“We urge the CFPB and FTC to work with state attorneys general to review whether these listing agreements and business practices violate federal consumer protection laws, including prohibitions against unfair, deceptive, or abusive acts and practices, and to take appropriate action where violations are found,” wrote the senators.

MV Realty operates in 33 states and has acknowledged signing more than 30,000 homeowners across the country to contracts in exchange for payments ranging from a few hundred dollars to a few thousand dollars, depending on the value of their home. Homeowners repeatedly told the investigative teams that they were unaware the contract would last for 40 years, include a lien on their property, and that they would owe between 3% and 6% of their home’s value to MV Realty if they listed it with another realtor. The company has filed lawsuits against homeowners it believes violated the contract, including cases where homes went into foreclosure, or a homeowner died and the property transferred to an heir.

“MV Realty, and companies like it, take tens of thousands of dollars from homeowners in exchange for a minimal up-front payment. By advertising these agreements as a “loan alternative,” companies are attempting to avoid the legal limitations on lending while in essence charging borrowers onerous rates,” wrote the senators, citing a news story from WSB-TV in Atlanta.

MV Realty has denied multiple requests for on-camera interviews but sent written statements defending its business model and denying any wrongdoing.

“MV Realty has always been committed to transparency in all of our business transactions, and we are confident that any inquiry will confirm that our team has operated in full compliance with the law,” wrote a spokesperson.

In response to Wednesday’s reporting by WHIO-TV and other Cox Media Group stations, and MV Realty spokesperson issued this response:

“MV Realty shares the same commitment to consumer protections as Senator Sherrod Brown (D-OH), Senator Ron Wyden (D-OR), and Senator Tina Smith (D-MN). We welcome the opportunity to engage in discussions with policymakers and regulators to address concerns and clear up misconceptions about our business practices.”

“We believe MV Realty’s business practices comply with state and federal laws in every community where we operate. Still, we continue looking for ways to improve transparency and make our agreements ever more consumer friendly and are keen to work with legislators and regulators to accomplish this. The confidence of consumers, regulators, and legislators that we are operating in a transparent and consumer friendly manner is critical to the success of our business, and we are committed to ensuring that such confidence is well placed.”

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