California protects 1,500 homeowners targeted by predatory real estate scheme

Photo byThe HD Post

CALIFORNIA – California Attorney General Rob Bonta announced September 17, that he secured a preliminary injunction – temporary court order, against MV Realty, a Florida-based company that engaged in a predatory real estate scheme.

The temporary injunction will protect nearly 1,500 California homeowners during the course of the litigation.

40 year exclusive listing agreement

According to the court document, MV Realty became active in California in late 2021 during the COVID pandemic when many people were in dire straits and preyed on financially vulnerable California homeowners.

Bonta says MV Realty misled homeowners looking for financial help, offering to pay them cash right away.

“MV Realty allegedly deceptively promised that the money, which usually ranged from a few hundred to a few thousand dollars, was “not a loan” and never needed to be paid back,” says the court document.

The company then locked the homeowner into a “Homeowner Benefit Agreement” that required them to exclusively use MV Realty to sell their home within the next 40 years or pay a penalty of 3% of the home’s value.

The court document says if the homeowner dies during the 40 year period, their successor will remain bound to the agreement.

Illegal lien

MV Realty also placed illegal liens on homes by recording a document titled “Memorandum of Homeowner Benefit Agreement” in the homeowner’s title records.

“Although MV Realty tells homeowners that the memorandum is not a lien, MV Realty allegedly intended the memorandum to act as a lien and cloud the homeowner’s title, preventing the homeowner from transferring the home without MV Reallty’s agreement,” said the court document.

The lien has the effect of potentially impeding or completely preventing a homeowner from obtaining or refinancing home loans.

Remove liens within 30 days

The preliminary injunction was issued by the Los Angeles Superior Court and was sought by Bonta and the Santa Barbara County and Napa County District Attorneys’ Offices.

The preliminary injunction requires MV Realty to:

• Remove the liens it has recorded statewide within 30 days of the court’s order, or within 5 days of notification from a California homeowner, who needs the termination to be able to move forward with a transaction related to the homeowner’s property.
• Stop recording new liens.
• Not enforce, during the pendency of the litigation, the “Homeowner Benefit Agreements” it signed with California homeowners.

A copy of the preliminary injunction can be found here.

RELATED: SB County officials warn of real estate scam run by “Big Brother” reality show contestant