MV Realty, a national real estate brokerage accused of duping homeowners into 40-year listing agreements, has filed for bankruptcy in 33 states. The company filed bankruptcy in Florida Southern District Court to restructure nearly $60 million in debt following a slew of state lawsuits — including in Pennsylvania — over its marketing practices. Boca Raton-based MV Realty Holdings submitted a Chapter 11 petition on Sept. 22 on behalf of all of its entities across 30 U.S. states claiming it owes $58.8 million to three lenders. The company, which operates in Philadelphia, currently lists its assets between $10 million and $50 million. MV Realty said that since last year it has been financially burdened by legal fees associated with lawsuits filed by the state governments of Florida, Pennsylvania, Massachusetts, Ohio, North Carolina, New Jersey and Indiana. Under MV Realty’s Homeowner Benefit Agreement, a homeowner signs over the right to list their home for the next 40 years to MV Realty in exchange for a cash payment ranging from $300 to $5,000. If the homeowner breaks the agreement or decides to terminate it early, they must pay the firm 6% of the appraised value of the home. Since starting the program in August 2020, MV Realty says it has enrolled more than 35,000 homeowners in 33 states and has paid homeowners nearly $40 million. The allegations by the states ranged from telemarketing violations to unfair or deceptive trade practices. Pennsylvania alleged that the real estate brokerage misled consumers about the terms of the HBA and claimed MV Realty obtained mortgages on consumers’ homes without their knowledge. In its lawsuit filed in December, then Attorney General and current Gov. Josh Shapiro called it "calculated deception." Read more here.
Source: Philadelphia Business Journal and Housing Wire; 9/25/2023