Predatory real estate company banned in MN

At first, Dr. Elizabeth Goodchild thought the certified letter she received from a Florida-based real estate company was some sort of scam.

Before her brother had died while cognitively impaired, he fell victim to several frauds, sending Western Union transfers to people he met on social media with addresses in far-flung countries such as Costa Rica. But after consulting with her lawyer, she learned the notice from the real estate company demanding a nearly $10,300 payment was in fact real.

While the family was in the middle of selling her brother’s house, Goodchild said the company demanded payment before the deal could go through. In getting her brother to sign in the first place, she said the company took advantage of a vulnerable, desperate man.

“His ability to make a decision of that size was definitely impaired. And I believe that they were predatory in their approach,” Goodchild, a Burnsville psychologist, said Wednesday.

The company, MV Realty, is now permanently banned from doing business in Minnesota for giving up-front cash under allegedly predatory contracts loaded with massive penalties that took 3% of a home’s value, according to the Attorney General’s Office.

While consumers bought into a fast and easy way to receive up-front cash, the state alleges the company reaped lucrative rewards when homeowners failed to abide by extreme and hostile contract terms.

MV Realty offered payments to homeowners, often worth less than $500, under a so-called Homeowner Benefit Agreement in order to obtain exclusive rights to sell the property someday if it ever went up for sale. The company would then file a lien against the property, usually without an owner’s knowledge, according to the state.

MV Realty became the subject of a state investigation that culminated in a September lawsuit that alleged deceptive trade practices and false advertising. On Tuesday, Attorney General Keith Ellison announced a settlement that nullifies all the company’s standing contracts in Minnesota, provides $20,265 in restitution, imposes a $1 million penalty if the company violates terms, and bans it from doing business in the state.