NJ takes action against MV Realty for misleading consumers

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The state announced action being taken against MV Realty and its principals June 6 for allegedly deceiving customers and making misrepresentations regarding its Homeowner Benefit Program (HBP).

The Attorney General’s Office and the Division of Consumer Affairs filed a complaint against the Florida-based real estate brokerage, while the Department of Banking and Insurance filed an order to show cause with the New Jersey Real Estate Commission alleging misconduct and taking action against the real estate licenses of the company and certain individuals.

Officials say more than 1,250 New Jersey homeowners fell victim to the company’s alleged scheme.

According to the complaint, MV Realty and its principals marketed the Homeowner Benefit Program to consumers as a low-risk way to quickly obtain cash – between $300 and $5,000 in payment upfront – in exchange for giving the right to MV Realty to serve as their real estate agents if they were to sell their homes in the future.

While MV Realty says the product was not a loan, and that homeowners had no obligation to repay them or sell their home in the future, the complaint notes that the HBP operates as a high-interest mortgage loan that gives the company the right to list a property for 40 years, survives the homeowner’s death, and levies an exorbitant early termination fee against homeowners.

The complaint also alleges that MV Realty, which is not registered as a telemarketer in New Jersey, sells the product through unsolicited calls to homeowners under financial pressure and in need of a cash infusion. Officials allege that the company’s practices are in violation of the Consumer Fraud Act.

“This company misled consumers about the true nature of its product,” said Attorney General Matthew Platkin in a press release. “MV Realty sold its product as free money when it was really a loan secured by what is often consumers’ most valuable asset, their home. Deceiving and profiting from homeowners by making false promises is abusive and will not be tolerated.”

Through the complaint, the state is seeking for MV Realty to:

• Discharge all liens against homeowners and pay them restitution
• Repay unlawfully acquired profits
• Pay civil penalties and attorneys’ fees and costs
• Permanently enjoin the defendants from operating in New Jersey

Meanwhile, the Department of Banking and Insurance’s Order to Show Cause alleges violations of the Real Estate License Act.

The action requires respondents to show cause why their real estate licenses should not be suspended or revoked and/or why fines or sanctions should not be imposed.

Pending the resolution of Order to Show Cause Proceeding, MV Realty agreed to stop any effort to engage New Jersey consumers in a Homeowner Benefit Agreement, which was solidified by a Consent Order signed by the company.

“This company uses deceptive practices to take advantage of homeowners by misleading them into agreements with the promise of free money and then profits by collecting fees from consumers who accidentally or unknowingly breach the agreement terms,” said New Jersey Department of Banking and Insurance Commissioner Marlene Caride. “The department is taking action to hold the company accountable for its egregious tactics.”

MV Realty did not immediately respond to a request for comment.