Embattled MV Realty has settled a lawsuit filed by Idaho Attorney General Raul Labrador involving an agreement it promoted known as Non-Title Recorded Agreements for Personal Services or NTRAPS.

These contracts, also known as “Homeowner Benefit Agreements,” lock a homeowner into a long-term arrangement to sell the property in exchange for a fee. This encumbrance could also prevent the owner from refinancing their mortgage.

Terms of the Idaho agreement

The settlement declares all agreements between MV Realty and Idaho homeowners to be null and void. MV Realty must contact every Idaho county recorder to remove the contracts from property records. Also, the company and its main officers — Anthony Mitchell, David Manchester, and Amanda Zachman — are banned from operating in the state for five years.

“Idaho families were tricked into signing contracts that locked them into 40-year obligations with massive penalties if they tried to use a different realtor,” Labrador said in a press release. “Our lawsuit forced them to void every one of these predatory agreements and leave Idaho for five years, ensuring our families can sell their homes freely without fear of scams designed to exploit them.”

Currently 33 states, including Idaho, have laws in place which limit the enforceability of these contracts, according to the American Land Title Association.

“American homeowners deserve unwavering protection of their property rights,” said ALTA Director of State Government Affairs Caroline Cone in its own press release about the Idaho agreement. “We commend Attorney General Labrador for taking decisive action to eliminate these harmful practices, securing a settlement and safeguarding Idaho families.”

National Mortgage News reached out to an email for MV Realty’s legal issues but has not yet received a response.

MV Realty filed for bankruptcy protection in 2023 but the status of the case is not clear; a dismissal motion was filed in June 2024 by the company, but new entries on the docket have been made through November.

A total of 12 attorneys general have filed suits against MV Realty, the ALTA press release said.

Terms of the New Jersey agreement

Days before the Idaho settlement mentioned in the ALTA release, New Jersey Attorney General Matthew Platkin and the Division of Consumer Affairs announced a $2.8 million settlement with MV Realty. More than 1,200 New Jersey residents entered into these agreements, including 140 who paid early termination fees ranging from $575 to $42,000 to get out of them.

Under the final consent agreement, MV Realty agreed to stop entering into HBAs with New Jersey consumers, cease enforcing existing HBAs and terminate any liens on homeowners’ properties.

Mitchell, Zachman, Manchester and David Reiner, the principals of MV Realty were also defendants.

They were also assessed a $1.5 million civil penalty and required to pay over $1.3 million in restitution to fully reimburse homeowners who paid early termination fees.

“During the COVID-19 pandemic, MV Realty targeted financially struggling homeowners in a deceptive scheme that locked up equity in their most valuable asset — their homes,” said Platkin in a press release. “This settlement frees New Jerseyans from the unlawful liens MV Realty placed on their homes, provides monetary relief to those who suffered financially in this scheme, and holds MV Realty accountable for its deceptive practices.”