Can Predatory Loans Rear Their Ugly Heads During Probate?
They say that the rich get richer while the poor stay poor, but if someone offers you $1,000 that you never have to pay back simply because you own a house, you should read the fine print. Of course, even homeowners are in a precarious enough financial position these days that $1,000 makes a big difference, so many of them will just take the money and be grateful for it, when there are so many other people out there who cannot qualify for a credit card with a $1,000 credit limit, much less a home mortgage loan. That is exactly what MV Realty was hoping that recipients of its cash advances would do, and thousands of homeowners apparently did, leaving them many thousands of dollars in debt to MV Realty, payable many years in the future. Unless the legal challenges that several states have brought against MV Realty over the terms of its Homeowner Benefit Program, the long strings attached agreements could cause lots of hassles in probate court for the coming generation. A Bronx estate planning lawyer can help you account for long forgotten debts and deal with them now so that they do not turn into major headaches for the personal representative of your estate.
MV Realty and the Gift That Keeps on Taking
MV Realty, a real estate brokerage firm that offers its services in 33 states, has attracted controversy for its Homeowner Benefit Program. The promotion is very popular with homeowners; tens of thousands have participated. Despite this, regulators and lawmakers consider the program a form of predatory lending. Homeowners who enroll in the program receive a $1,000 gift, albeit one that comes with an obligation attached. If a participating homeowner sells his or her home within 40 years of receiving the gift, the homeowner must choose MV Realty as his or her real estate broker. Homeowners who wish to get out of the agreement must pay a penalty in an amount equal to six percent of the value of the house.
Those are such predatory terms that, according to one Pennsylvania attorney, they “would make a loan shark blush.” In fact, three states have filed lawsuits against MV Realty over the Homeowner Benefit Program, and U.S. Congress members from three other states have openly criticized it. They may be able to stop the Homeowner Benefit Program in its tracks, but the fact remains that financial Faustian bargains that you made when you needed money quickly can cause all kinds of problems with your estate in the future. It is best to be honest about them with your estate planning lawyer, and perhaps also with your family.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you take a realistic view of the creditors that may come forward to seek repayment of debts from your estate during probate. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.