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Arizona Attorney General Kris Mayes is suing a real estate company that allegedly engaged in a predatory title scheme that defrauded approximately 1,500 Arizona residents, saying the company violated the state’s consumer fraud act.
Non-Title Recorded Agreements for Personal Services, or NTRAPS, have been banned in multiple states because they use the promise of a quick sum of money — often less than $1,000 — to lock homeowners into a yearlong contract that they often don’t understand until they try to sell their home.
NTRAPS work by offering a homeowner a free market analysis of their home, which usually comes with a payment to the homeowner to show how serious the company is in the home. As soon as a homeowner signs, they get the money, the analysis and usually forget about the interaction.
But that contract, which can run for up to 40 years, requires they use a specific company to list their home if they decide to sell it in the future. Failure to do so means they must pay the company 3% of the value of their home.
Mayes is now suing one of the nation’s largest companies behind NTRAPS, MV Realty, alleging that it violated the state’s Consumer Fraud Act. The Arizona Mirror first reported on these agreements in 2023, when legislation aimed at regulating them failed to gain momentum.
“MV Realty misled homeowners about the true nature of the Homeowner Benefit Program. Arizona homeowners who fell victim to MV Realty’s deceptive sales practices were trapped by the liens placed on their homes and stripped of their hard-earned equity,” Mayes said in a press release announcing the lawsuit. “My office will not allow predatory companies to take advantage of and profit from Arizona homeowners by making false promises.”
MV Realty did not immediately respond to a request for comment.
MV Realty marketed NTRAPS as a “Homeowner Benefit Program” that it aggressively pushed on Arizona homeowners through robocalls and other telemarketing techniques that are also under scrutiny by Mayes’ office.
The FCC also has gone after MV Realty for using robocallers.
MV Realty filed for bankruptcy in 2023 amid multiple investigations by multiple state AGs.
Mayes’ lawsuit alleges that MV Realty enticed 1,600 Arizonans to sign one of the agreements, with the majority of those homeowners receiving $1,000 for doing so.
The complaint says that the agreements specified that homeowners had to sell their house through MV Realty and pay either 6% of the sale price or 3% of what the company valued the home at time of signing. If a homeowner tried to terminate the contract early, the company would then demand an “Early Termination Fee” equal to 3% of the home’s value, which was determined by MV Realty.
“MV Realty incentivized volume enrollments by paying its sales agents a $500 commission for each HBA originated (rather than a salary) and used performance metrics to drive sign‑ups,” the complaint says. “Defendants typically withheld complete documents from homeowners until a notary arrived to execute the HBAs.”
Most homeowners never saw the agreement until the notary arrived and then were not left with copies, according to the complaint.
The AG also found that MV Realty failed to “comply with Arizona’s registration, bonding, and disclosure requirements for telephone solicitations.”
MV Realty’s telemarketers used third-party data they purchased to call homeowners, wouldn’t disclose the name of their company and encouraged them to join the “Homeowner Benefit Program.”
Mayes is asking the court to place a permanent injunction against the company from continuing the practice and is also seeking penalties of $10,000 per violation of the state’s consumer protection act, as well as $1,000 for each violation of the National Do-Not-Call list.
MV Realty’s license to operate in Arizona expired at the start of this year after the company decided not to renew it.
