MV Realty filed a voluntary petition for bankruptcy in North and South Carolina Friday morning.
The company filed under Chapter 11.
This news comes after Action 9 reporter Jason Stoogenke first reported on the business last year.
That sparked North Carolina Attorney General Josh Stein’s lawsuit and a new law in North Carolina that prohibits long-term real estate contracts like the ones MV Realty used. In August 2023, a judge issued a preliminary injunction against the real estate company.
Homeowners would get a small check now but a big penalty later, which is 3% of the value of your home, if you don’t use it to sell your house.
The U.S. Senate began pressing MV Realty for answers about its 40-year listing agreements.
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‘It’s outrageous’
When Patricia Bandy sat down with Stoogenke last October, she had no idea so many other people had signed deals with MV Realty.
“I don’t like being taken advantage of; I work hard for the money that I have,” Bandy said.
The company would offer people like Bandy something called a Homeowner Benefit Agreement. In exchange for $5,000, you would have to give MV Realty exclusive rights to sell your home for the next 40 years.
Now, the company’s bankruptcy filing is aimed at keeping the business afloat to pay creditors over time.
But the big questions are what about the homeowners, and how does this bankruptcy impact them?
Charlotte bankruptcy lawyer John Woodman said: “If this was Chapter 7—and MVR was going out of business—that would be one thing. But since it’s Chapter 11, MVR stays in business, at least for now.-It’s safe to assume MVR is going to hold the homeowners to the contracts.”
Liz Coyle runs a consumer group in Atlanta and says even if homeowners don’t see a change, the industry might.
“It’s outrageous,” Coyle said. “It certainly shows that they are in financial trouble because their business model has harmed people and they’ve gotten caught.”
MVR stopped offering the agreements earlier this year, and it’s consistently defended both the program and its transparency, saying it’s a good alternative to traditional real estate contracts.
Seamus Hughes contributed to this report.
(WATCH: Senators concerned about homeowners stuck with MV Realty contracts)
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