Bulletin: MA2023001

Dear Associates:

MV Realty PBC, LLC a/k/a MV Realty, a real estate brokerage headquartered in Florida but operating in over thirty-three states was promoting and selling to homeowners a product called a “Homeowner Benefit Agreement” (“HBA”). This product was described in Stewart’s Underwriting Bulletin SLS2022007. In Massachusetts, MV Realty secured the homeowner’s obligations under the HBA by recording mortgages in favor of MV of Massachusetts LLC and MV Realty of Massachusetts, LLC, many of which contained a forty-year term.

The Massachusetts Attorney General filed suit against MV Realty PBC, LLC and MV of Massachusetts, LLC in December of 2022, seeking a preliminary injunction against the defendants relating to the HBAs marketed to Massachusetts homeowners. In February 2023, the Suffolk Superior Court allowed the Attorney General’s request for the preliminary injunction which, among other things, prohibits MV Realty from exercising the Power of Sale contained in any mortgages it holds and from assigning any mortgages to third parties not subject to preliminary injunction. In addition, the court ordered MV Realty to cease encumbering properties in the following cases: (a) if the mortgagee’s name is incorrectly listed as “MV Realty of Massachusetts, LLC” instead of “MV of Massachusetts, LLC”; (b) if the mortgage was recorded when MV Realty was asserting in any of its marketing material that it would not place a lien on property; (c) if the final mortgage document was not reviewed by a Massachusetts licensed attorney; and (d) if the mortgage was “originated without the presence of a Massachusetts licensed attorney at the closing and/or signing of the mortgage.”

A review of the records at many of the Massachusetts registries shows that since the injunction was entered, numerous discharges have been recorded; however, many discharges are in the name of the non-existent MV Realty of Massachusetts, LLC, even if the mortgage was granted to MV of Massachusetts LLC.

Underwriting Guidance:

If your title search discloses a mortgage held by MV of Massachusetts, LLC, a discharge executed by an individual authorized under G.L. 183 section 54B, naming MV of Massachusetts, LLC as the discharging entity must be obtained and recorded as part of the closing transaction and prior to the issuance of any title insurance policies.

If your title search discloses a mortgage held by MV Realty of Massachusetts, LLC, a discharge executed by an individual authorized under G.L. 183 section 54B, naming MV of Massachusetts, LLC and MV Realty of Massachusetts, LLC as the discharging entities must be obtained and recorded as part of the closing transaction and prior to the issuance of any title insurance policies.

If a release cannot be obtained, or if you have reason to believe that the property owner may have entered into this type of agreement, but your title search does not reveal a recorded mortgage or other kind of recorded memorandum, please contact your Stewart underwriter for further guidance.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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