A Florida-based real estate firm has agreed to pay nearly $650,000 in restitution to settle a lawsuit brought more than three years ago by the Pennsylvania Attorney General's Office.
MV Realty offered a check, typically under $1,000, to homeowners in exchange for the exclusive right to serve as the listing agent if the property was ever sold – raking in a commission of between 3% and 6%.
Individuals who broke the 40-year contract were subject to a penalty equal to 3% of the home's value. Mortgage liens, which can complicate attempts to refinance or take out a home equity loan, were placed to enforce the provisions. If the property owner died, MV Realty's agreement would extend to their heirs.
Lawyers for the state have contended that the practice violated the commonwealth's Consumer Protection Law.
The company, under the proposed consent petition, will cancel more than 1,300 mortgages filed across the commonwealth, including hundreds in Philadelphia, associated with the "homeowner benefit agreements," or HBAs.
"Pennsylvania homeowners who fell victim to MV Realty's deceptive sales practices were trapped by the mortgages placed on their homes," Attorney General Dave Sunday said in a statement. "This settlement provides impactful relief by eliminating those mortgages and protecting homeowners' most valuable assets."
Sunday's office said the legal agreement must still be approved by the Philadelphia Court of Common Pleas. The case, filed in December 2022 by then-AG Josh Shapiro, had been scheduled to go to trial in June.
If and when the settlement is finalized, MV Realty will have 30 days to terminate the mortgages and 45 days to notify property owners that the HBAs are void and unenforceable, according to the consent petition. Members of the public do not need to take action to be released from the mortgages.
Any legal action against homeowners for alleged violations of the HBAs will be withdrawn, and the company and its leaders will be barred from conducting future real estate dealings in Pennsylvania.
In addition to paying restitution and legal fees, MV Realty, which is headquartered in Fort Lauderdale, and its founder, former "Big Brother" contestant Amanda Zachman, are on the hook for upwards of $2 million in civil penalties if they are proven to have violated the terms of the settlement. Those fines are suspended, as long as the parties follow the terms of the agreement, court documents indicate.
The firm is directed to pay $645,595 in restitution to alleged victims of the scheme, with an initial payment this summer and a final installment coming no later than March 2027. The AG's Office will distribute the money to homeowners who have already filed complaints and those who do so within a period of 60 days after a judge approves the settlement.
Anyone who paid an early termination fee relating to a MV Realty agreement may qualify for restitution and is strongly encouraged to file a complaint with the AG's Bureau of Consumer Protection by calling 1-800-441-2555 or emailing consumers@attorneygeneral.gov.
State attorneys general across the nation, including those from New Jersey, Florida and Massachusetts, have reached agreements to resolve similar lawsuits against MV Realty.
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