UPDATE on ‘Free Money’ Trap that left PA homeowners with 40-year Liens

PITTSBURGH — Several more Pittsburgh area homeowners have come forward accusing a Florida real estate company of taking advantage of them during desperate times.

As 11 Investigates reported exclusively, more than 1200 Pennsylvanians ended up with 40-year liens on their property, after accepting just a few hundred dollars from MV Realty.

“It’s appalling. It’s absolutely appalling that they do that,” 77-year-old Donna Crane-Zastudil, who got $550 from MV Realty, told 11 Investigates. “I needed the money and that’s how I got into this mess. Now I’m out 6000 bucks because of it.”

Several people, including Donna’s family, contacted Channel 11 after seeing our investigation of MV Realty, last week.

The company, which operates in 33 states, gives homeowners a few hundred dollars upfront, in exchange for an agreement to use them later as their listing agent if they decide to sell their homes. However, all the homeowners we talked with say they had no idea the contract lasted for 40 years— longer than most mortgages— or that MV Realty puts a lien on their property to enforce it.

Click here to WATCH this BEHIND-THE-SCENES video of our joint INVESTIGATION of MV Realty with eight of our Cox sister-stations around the county.

Desperate homeowners targeted

It was December of 2020, right in the middle of COVID, and retired nurse Donna Crane-Zastudil was going through hard times.

“I needed the money for groceries. Because we were just really, really, really in bad shape then,” Donna said.

The 77-year-old now lives in an independent living facility in White Oak, but back then, she was still living in her Kennedy Township home. Her disability payments were running out and her Social Security had yet to kick-in. So, she went online to apply for a short-term loan.

Not long after that, she got a call from MV Realty, which 11 investigates learned buys leads from those companies.

“I’m basically down to my last couple of bucks, and the man says, ‘I’ll give you $550. Someone will be out tonight. You sign the paper, and you’ll have your money in your checking account tomorrow,’” she remembered.

Sure enough, a notary showed up just a couple of hours later. It was all done in a rush, signing the paperwork outside, in the cold, on her porch.

Despite the aggressive sales push, Donna says it didn’t trigger a red flag in her mind.

“No, it didn’t. At that time, it triggered relief, because I knew I’d have some money. I could buy groceries,” she said. “Sometimes you are desperate, and you don’t think things through.”

Donna says she forgot all about MV Realty, until she decided to sell her home this fall and listed with another real estate agent.

Within days, she received a letter from the company via FedEx reminding her she’d have to pay them, too. She would not be able to close any sale, unless she satisfied the lien they put on her title.

She looks back now and regrets that she didn’t just hang up on MV Realty when they called her out of the blue.

“I think they took advantage of me. I think they took advantage of me because they knew I was desperate at the time.”

Homeowners blindsided by liens

Like so many others we talked with, Donna didn’t realize signing those papers obligated her to use MV Realty as her listing agent for the next 40 years and that the company puts a lien on the property to enforce it.

The contract says even if homeowners don’t use MV Realty, they still have to pay the company 3-percent of the “purchase price,” all for taking just a few hundred dollars.

Donna ended up paying MV Realty nearly $6000 for the $550 she received.

“Yes, they made a lot of money off me. They take a piece of you! And that is totally unfair,” she said. “There was nothing I could do. My hands were tied.”

Gladys Walasik, with Keller Williams Realty, was Donna’s real estate agent who listed her home for sale.

Walasik says no one from MV Realty ever even stepped foot in the house, but they ended up with a bigger commission than she did.

“It’s not right. That’s the bottom line. It’s just not right,” Walasik said. “In my opinion, they earned zero!”

Walasik says realtors must abide by a strict set of rules, and she believes MV Realty violated their code of ethics.

“I’ve been a realtor for 40 years and I have never seen anything like this,” she said. “Completely unethical. They did not explain anything to the seller as far as what the real terms of this contract were.”

When contacted by 11 Investigates for comment about its business practices, MV Realty would not do an interview, but released a statement that said in part:

“The agreement is very clear and is in plain English. With respect to any filing in the county, any filing is specifically limited to protecting MV Realty’s rights under its agreement. It has no adverse effect on homeowners. The filing is not only accurately described in the agreement, but for the avoidance of any doubt, the filing itself is signed by the homeowner, and that document they signed is what is recorded with the county.” –MV Realty Public Relations

Florida AG takes action

The Florida attorney general filed suit against MV Realty, this week, saying the company uses “abusive and deceptive” practices.

“For many Floridians their home is their most important asset and the cornerstone of their financial stability. For a company to prey on unsuspecting homeowners in a way that locks them into a 40-year obligation designed to siphon away equity from the property is disgraceful. Today, I filed legal action to end this deceitful practice and protect Florida homeowners from further harm,” Attorney General Ashley Moody said.

The Florida AG is seeking to stop MV Realty from enforcing its contracts and trying to get money back for homeowners, at least for Florida residents. It is possible, but not certain, that the Florida action could also help homeowners impacted here in Pennsylvania.

“The Florida Deceptive and Unfair Trade Practices Act authorizes our office to investigate and file actions for conduct by Florida companies that affects out-of-state residents,” Florida AG Deputy Communication Director Kylie Mason told our Cox sister station in Dayton.

MV Realty told 11 Investigates it was in the process of reviewing the complaint filed by the Florida AG but defended the company’s practices as following the law.

“MV Realty has always been committed to transparency in all of our business transactions, and we are confident that any inquiry will confirm that our team has operated in full compliance with the law,” MV Realty Spokesperson Diana London wrote in an email.

Extra legal Question in PA

Beyond the company’s sales tactics, there’s another legal question here in Pennsylvania,

State law says listing agreements can be no longer than one year.

“If we are limited to one year why would anybody else have more? And especially 40 years!” said real estate agent Gladys Walasik.

MV Realty told 11 investigates it believes it’s Homeowner Benefit Agreement “is compliant with all state laws” and maintains that its contract is not a listing agreement— just an agreement to have a listing agreement for 40 years.

“When they are ready to sell, we enter into a listing agreement that is compliant with the real estate laws of the state of Pennsylvania,” MV Realty said.

Still, the company’s contract raises the question of whether the MV Realty is trying to circumvent the intent of the law on listing agreement limits in Pennsylvania.

Longtime Pittsburgh real estate attorney Jim Herb told 11 Investigates the contract’s language is very confusing.

“In my opinion, it’s not legal because it’s deceptive,” Herb said. “I think they’re getting away with it because no one has challenged them on it yet.”

That could change now that the Florida attorney general has filed suit against the company. Their office is asking any homeowners, even outside of Florida, to file a complaint with their office if they’ve had a problem with MV Realty. Click here to file a complaint at myfloridalegal.com.

The Pennsylvania Attorney General AG is also investigating about 20 complaints against the company here in our state, but told 11 Investigates it can’t comment any further, at this time.

You can also file a complaint with the Pennsylvania Attorney General by contacting the AG’s Bureau of Consumer Protection online or calling 717-787-9707 for more information.

Donna is among those who filed a complaint with the PA Attorney General. She is hoping they will take some action against MV Realty to help Pennsylvania homeowners.

“They have to be stopped, because they are preying on people who are desperate.”

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