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Florida-based real estate company, MV Realty, has been permanently banned from doing business in Minnesota after allegedly using predatory contracts to take advantage of vulnerable homeowners. The company would offer payments to homeowners under a Homeowner Benefit Agreement, which came with massive penalties that could exceed $10,000 if the homeowner failed to abide by its terms.

    Dr. Elizabeth Goodchild's brother fell victim to one such contract before his death. He was cognitively impaired and unable to make informed decisions about his finances. The company took advantage of this vulnerability, demanding payment from the family before they could sell the house. Goodchild believes the company was predatory in their approach.

    The state alleges that MV Realty reaped lucrative rewards by taking 3% of a home's value as penalties for breaking the agreement. Consumers were often unaware of these terms and were told that the payments did not constitute a loan. The company would file a lien against the property without the homeowner's knowledge, which was only discovered after they had passed away.

    A settlement has been reached between MV Realty and Minnesota Attorney General Keith Ellison, nullifying all standing contracts in the state and providing $20,265 in restitution. Three of the company's officers are barred from acting as residential real estate brokers for five years, and one is fined $10,000. The company denies the allegations.

    MV Realty solicited services by phone and over the internet, with notaries visiting interested consumers at their homes to present printed contracts without all listed terms. Consumers were unaware of a flat administrative fee and the 3% home value penalty for breaking the agreement. Sellers were instructed to misrepresent core tenants of the agreement, and real estate agents employed by MV Realty were generally aware of the poor terms of the contracts.

    State investigators found that nearly all Minnesota customers reported no knowledge of a lien on their home, and most were unaware of provisions outlining inherited debt, the 40-year life of the contract, or expensive early termination fees. Other states have taken legal actions against MV Realty for unlawful business practices.