And it’s dramatic.
That kind of result, that kind of disparity can’t simply be by accident.
[00:00:36] Bob: Welcome back to The Perfect Scam.
I’m your host, Bob Sullivan.
Elizabeth Blosser from the American Land Title Association begins researching the contracts as soon as she hears about them.
You want to, you know, cancel this, this agreement.
[00:03:52] Elizabeth Blosser: I would say that this particular business model is new.
I don’t know that I would say that concept is new.
So we, we’ve seen similar types of things happen in the past.
And any time a property is transferred or refinanced; all of those liens need to be addressed.
[00:05:28] Elizabeth Blosser: Absolutely.
[00:05:48] Bob: What is the process for adding a lien?
So the process does vary from state to state, and the name of the office varies.
And so someone comes to their office, and they record this document that has, has been signed.
I think that leads to some confusion for consumers, no?
She’s helping some of them.
[00:07:14] Kerry Smith: Most people understand a mortgage loan, right.
Here, a homeowner is entering into a contract where they’re obligated to pay fees to MV Realty.
And if those fees are not paid, MV Realty has the right to go after the home.
The word mortgage just means obligation of some kind?
They can go to court to enforce their agreement against the home.
The $640 Timothy received was roughly 10% of that $6000.
But the, the cost can be three, four, five, seven thousand dollars, right?
[00:10:42] Kerry Smith: It is.
It’s, it’s, it’s really astounding.
It then provides the homeowner with about 10% of its guaranteed commission.
If you consider that in loan terms, it’s extraordinary.
If they sold within a year, it’s even worse.
It’s an APR of 900%.
And those are really interest rates that would make a loan shark blush.
[00:12:20] Bob: MV Realty told AARP its program is not a loan.
The firm’s website at one time called it a loan alternative.
[00:12:37] Timothy Calhoun: I sent them back the $640 that they gave me.
So we’re still kind of in limbo about these people still being on my mortgage.
[00:13:03] Timothy Calhoun: That’s right, and I plan on leaving it to my son.
[00:13:06] Bob: Okay, so tell me where things stand today now.
[00:13:09] Timothy Calhoun: Well today they actually stand, the Feds are involved.
[00:13:32] Bob: Hmm.
And I’m sure my lawyer would run and tell me that one.
[00:13:44] Bob: Hmm.
[00:13:50] Timothy Calhoun: I still don’t know what the final outcome is going to be.
[00:13:55] Bob: Yeah.
That uncertainty’s terrible.
[00:13:58] Timothy Calhoun: But they’re just, that’s what the lawyer explained to us.
She said that they’re going after the equity of your house.
They’re not trying to take your house.
They just want to have the equity in it.
[00:14:10] Bob: Timothy is convinced the stressful situation is impacting his health.
He had a stroke recently.
I’m getting better though, you know, I’m getting stronger.
I wish you well.
But you’ve got enough to worry about without all this, right?
There was no pain involved.
[00:14:47] Bob: Wow.
[00:14:48] Timothy Calhoun: No pain to this day.
But now I had to put a piece of tape on it.
[00:15:00] Bob: Oh my God.
When did that happen?
[00:15:03] Timothy Calhoun: It happened the 4th of last month.
[00:15:08] Bob: This, you’re only a month out from your stroke?
[00:15:11] Timothy Calhoun: Yep.
[00:15:13] Bob: Wow.
Do you think all of this happening to your house had anything to do with you having the stroke?
[00:15:19] Timothy Calhoun: I’m sure it has a lot to do with it.
I’m always thinking about it.
[00:15:24] Bob: Yeah, all the stress, yeah.
Then discovered she was not able to pick a new agent because of the contract.
[00:16:08] Kerry Smith: They wouldn’t let her out of the deal.
She has canceled the contract, outlined all the problems that happened to her.
So in Ms. Pierce’s case, her 3 days had not even begun to expire.
She was never given a copy of this form.
Ultimately, that issue will have to be resolved in court.
We’re fortunate in Pennsylvania that our Office of the Attorney General has taken action against MV Realty.
Ultimately, a court’s going to have to decide that issue.
There will be opportunities for both sides to get documents and information from the other side.
That can take some time.
She’s staying out of state with her daughter at the moment.
[00:18:21] Kerry Smith: It’s very frustrating.
And that’s not what she wants to do.
And she’s right.
[00:19:21] Kerry Smith: Exactly.
So she’s already missed out on an opportunity to sell her home at a higher price.
[00:20:09] Bob: MV Realty denied to AARP that these agreements cloud titles.
Her problems with the contracts run deeper.
Ms. Pierce’s case is a perfect example.
There should never be a 40-year listing agreement for real estate services.
[00:22:13] Bob: There’s been attention on the federal level too.
AARP supports this legislation.
The new laws would be straightforward, she said.
[00:22:52] Elizabeth Blosser: So the, the bill is not very long.
It’s only two pages, but it does a lot of things.
There’s a, there’s a lot of power in those, those two pages.
So hopefully that will be a deterrent to this sort of practice in the future.
So the first thing we do is define these unfair service agreements.
So that’s kind of an overview of what, what the bill does.
[00:25:46] Elizabeth Blosser: Correct.
[00:25:59] Bob: Do you want to take credit for the, the NTRAPS acronym?
[00:26:03] Elizabeth Blosser: I am going to take credit on behalf of our association.
The exciting thing about seeing these bills pass is this is a consumer protection issue.
It is not a partisan issue; it is not a political issue.
Legislation has also been introduced in a, in another six states.
We’re hopeful to see quite a bills move.
But of course, every time a state passes legislation my, my goal goes, goes up.
Are we going to draft legislation banning these types of agreements?”
And I feel like we, we haven’t slowed down since.
[00:31:35] Bob: The support has not been universal, however.
It’s a bit like other securitization models.
Also familiar to some listeners, is one of MV Realty’s co-founders.
She filled the role of a, uh, tough contestant on that show.
And not only did I win, I kicked your ass.
She wants to push my buttons; well she just pushed the wrong one.
[00:34:47] Bob: Zachman herself is named in the Pennsylvania and Florida Attorney General’s lawsuits.
MV Realty is not her first association with home selling.
She comes from a real estate family.
So we’re, we’ve been trying to sell that one for a little bit now.
So pretty busy day.
And um, wish me luck.
I need to sell some.
I need to make some money!
Many of the people who sign up with MV Realty are long-term homeowners.
KIRO TV in Seattle said it interviewed a former employee who acted as a telemarketer for MV Realty.
The employee described that most people they contacted as “elderly.”
And it’s dramatic.
And it’s 69%.
That kind of result, that kind of disparity can’t simply be by accident.
And we’re very, very concerned about the fair housing implications here.
We do not focus on any specific demographic group."
Or really any service that requires a lot of paperwork and the presence of a notary?
Wait until you have the written documents.
Share it with a trusted friend.
So this is a very competitive environment, so a letter like this might not look that out place.
Have a second set of eyes on it, talk to a trusted advisor.
You know it’s somebody’s home, it, it means a lot of things.
Here’s Elizabeth’s advice for that.
And also, your, your county recorders or county clerks' office.
All of these people are there to provide information and, and guidance.
So reach out and talk to the people who are designated to be resources for you in this area.
First you should take a deep breath and be kind to yourself.
And I would say don’t, don’t leave out any detail.
When did you hear about these sorts of agreements?
How were you contacted?
When and how many times were you contacted?
What sort of promises or offers were, were made to you?
How was your agreement signed?
When did you get executed documents?
What was your understanding of the agreement?
What was the, the compensation you were provided?
What were the terms of the agreement?
So they’re going to be interested in, in hearing these types of stories.
you might call the office or usually there’s an online portal where you might submit the information.
So it’s important that state attorneys general hear about what’s happening.
Also, again, there has been great news reporting and, and investigative journalism on this topic.
I
[00:45:14] Elizabeth Blosser: It’s kind of funny.
And so I started talking about, you know, payment for people to sign 40-year listing agreements.
And she cut me off.
She’s like, “Oh, I know all about that.
I know about that.”
And I was like, “Really?”
And she said, “Yeah, I heard about it through AARP.”
So the, the word is getting out and that’s fantastic.
So, only thing we could do is just take a stab at keep our heads above water.
[00:46:28] Bob: How much is this lawyer costing you?
[00:46:30] Timothy Calhoun: She’s not costing me a dime.
And she’s probably the best in the city that does what she does.
Call the AARP Fraud Watch web link Helpline at 877-908-3360.
Their trained fraud specialists can provide you with free support and guidance on what to do next.
Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts.
For AARP’s The Perfect Scam, I’m Bob Sullivan.
