The Pennsylvania Attorney General’s Office has sued a Florida-based real estate firm for misleading homeowners and obtaining mortgages on their homes without them knowing, the office announced Wednesday morning as Philadelphia City Council prepared to hold a hearing on the practice in the city.
In exchange for a few hundred dollars in most cases, homeowners signed agreements that give MV Realty the right to be the listing agent if they choose to sell their homes. The length of the contract is 40 years.
The Attorney General’s office alleges that MV Realty’s sales pitch to homeowners is very different than the agreement homeowners end up signing. The contract allows the company to obtain a mortgage on homes to enforce terms.
Under these contracts, MV Realty receives thousands of dollars in fees if the company sells the property, if the homeowner cancels the agreement, and for any transaction in which the property changes hands. That includes losing a home through foreclosure or transferring a home when the owner dies.
The office knows of around 1,000 mortgages tied to MV Realty. More than 500 Philadelphia homeowners have signed agreements with the company.
“MV Realty is a scam that exploits Pennsylvanians in vulnerable financial situations, and my Office isn’t buying it,” Attorney General Josh Shapiro said in a statement. “My office will protect homeowners’ most important asset — the value of their real estate.”
The nonprofit Community Legal Services of…
