Homeowners beware: Registry warns of mortgage ‘gimmick’

A possible scam that looks good on paper will put a 40-year lien on your home

By Tony DoBrolski

PITTSFIELD — The first time Patricia Harris saw the document, she thought something didn’t seem right.

The registrar at the Middle Berkshire Registry of Deeds, Harris said, “I noticed that this was an unusual looking mortgage.” And she has been looking at official documents for 23 years.

“It didn’t have the typical characterizations that we’re used to seeing,” she said. “It certainly wasn’t from a lending institution. It didn’t really follow the laws that we’re used to seeing.”

It was, in fact, evidence of a suspected scam that right now can make homeowners a little money, but later can cost them a whole lot more. In a lawsuit, the Massachusetts Attorney General’s Office accuses the company that originated the document of making “false and misleading statements.”

What Harris saw was a document known as a “homeowner benefit agreement,” provided by the Massachusetts subsidiary of a Florida-based realty company. Known by its initials, an HBA makes small upfront cash payments in exchange for the firm’s exclusive right to act as the listing brokerage when the homeowner decides to sell. The HBAs, with a 40-year maturity date, are actually mortgages submitted to the registry without the homeowner’s knowledge.

Harris decided not to file the document, but at least 500 similar mortgages produced by this same company, MV of Massachusetts LLC, had been filed as of December at deed registries across the state, according to the state Attorney General’s Office. Eighty-nine have been filed in the six registries in the four counties of Western Massachusetts.

Tipped off by state registrars including Harris, the AG’s office in December filed in Suffolk Superior Court a lawsuit against MV of Massachusetts LLC, a subsidiary of MV Realty PBC LLC of Delray Beach, Fla. The court granted the AG’s motion for a preliminary injunction, which restricts MV Realty from engaging in unfair and deceptive marketing practices, prohibits the company from obtaining or recording additional mortgages during the pendency