Illinois AG piles onto troubled brokerage MV Realty’s legal woes

Firm accused of shady business practices that have tied up unwitting homeowners into decades-long brokerage contracts preventing sales, refinancing

Illinois Attorney General Sues Brokerage MV Realty
Attorney General Kwame Raoul and MV Realty's Amanda Zachman (Getty, LinkedIn)

MV Realty and one of its founders Amanda Zachman, whose real estate brokerage is accused of deceptive business practices in at least nine other states, now faces a lawsuit from Illinois Attorney General Kwame Raoul.

Raoul is accusing Zachman’s MV Realty PBC, LLC and MV Realty of Illinois, LLC, along with their corporate managers, of preying on financially vulnerable consumers through complex real estate instruments.

Raoul’s lawsuit, filed in Cook County court, asserts the MV Realty entities employed misleading tactics to ensnare consumers in confusing and lengthy 40-year brokerage contracts.

It contends that MV Realty presented itself as an innovative real estate brokerage offering unique services. However, the company purportedly targeted individuals in dire financial straits, subjecting them to contracts laden with hidden fees and onerous restrictions on selling their homes.

These contracts, known as Homeowner Benefit Agreements, allegedly imposed steep termination fees and constrained homeowners from selling or refinancing their properties for decades.

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The lawsuit seeks to halt MV Realty’s practices and requests that affected contracts be rendered void or rescinded. Additionally, Raoul aims to bar the defendants from further involvement in the real estate industry, revoke their licenses, and secure restitution for impacted consumers, alongside civil penalties.

In addition to Zachman and the companies, Raoul also named MV corporate managers Antony Mitchell and David Manchester as defendants. Zachman and MV Realty didn’t immediately return requests for comment made through the company website.

MV Realty’s legal woes extend beyond Illinois, where it began signing up homeowners to its contracts in 2020. Lawsuits against the firm are pending from attorneys general in multiple states, including California, Georgia and Pennsylvania.

One Illinois homeowner, Frank McEntee, participated in MV Realty’s program and got entangled in financial difficulties due to the company’s contracts, WBBM reported in February. Despite having paid off his home, McEntee faced obstacles in accessing additional financing, as MV Realty’s agreements clouded his property title and hindered his attempts to secure a reverse mortgage.

Amid mounting legal challenges, MV Realty filed for Chapter 11 bankruptcy in September 2023. However, the company has proposed a reorganization plan that includes measures to address the grievances of affected homeowners. These efforts include an adjudication program allowing homeowners to contest their contracts and potential changes to existing agreements.

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