TORONTO – Consumers filed 91 complaints about mortgage brokers to the Financial Services Commission of Ontario, the watchdog that regulates mortgage brokers in the province, in fiscal 2014-2015. The following is a sampling of those complaints, obtained by The Canadian Press through a freedom-of-information request:
The Right of way — The complainants, private investors, claim they were led to believe that a cottage or a home could be built on the parcel of land they were providing a mortgage loan for. They later found out that the property was a right of way. “Had we been made aware of this fact, neither of us would have invested in the $80,000 second mortgage,” they wrote in a letter dated Dec. 9, 2014. “A rudimentary search of title would have revealed this limitation, which you failed to obtain.”
The regulator issued a warning letter to the broker on June 26, 2015. “This matter has been noted and should future occurrences of non-compliance be brought to our attention, FSCO may consider this a repeat occurrence,” the letter reads.
The alleged fraudster — One complainant, in an email dated, March 2, 2015, urged the regulator to launch an undercover investigation into a particular broker over allegations that he committed numerous counts of fraud. The complainant claims the broker has used fraudulent documents to arrange mortgage and lines of credit for his clients and then kept anywhere from 10 to 50 per cent of the borrowed amounts.
“My intention in reporting his activities is simply that honest businesses are being ripped off and while these lending crimes may seem like faceless crimes, other honest borrowers like me pay the price for these crimes ultimately,” the complainant wrote.
FSCO responded by issuing a letter of caution on May 19, 2015. The agency’s letter made no mention of application fraud, instead taking issue with the broker for using an unauthorized name in his public relations material.
The second mortgage — The complainant, along with a business partner, decided to invest $1.5 million in a private mortgage. She alleges the professional brokering the deal lied to her and told her it was a first mortgage, when in fact it was a second mortgage. “We would have never even contemplated this deal if we knew it was a second mortgage,” she writes.
In an email exchange submitted to the regulator, the broker admits to the error but calls it “virtually academic.”
FSCO responded by issuing a letter of caution of the broker on June 23, 2015. “It is our understanding that you have failed to disclose the material risk of the mortgage,” the regulator wrote. “Since you have taken the mitigating steps and have repaid the complainant her funds in full, the course of action we have chosen is to issue a letter of caution as this is your first occurrence.”
The LinkedIn profile — One of the complaints that FSCO received was about an individual who allegedly called him or herself a mortgage agent on LinkedIn, despite not having obtained a licence. “No evidence was provided but the complainant alleges that (redacted) appropriated over $60,000 in deposits for construction projects,” a document reads.
The regulator responded with an email on Feb. 25, 2015 that demanded the broker confirm in writing within 10 days that he or she was not dealing in mortgages or acting as a mortgage lender. The regulator also instructed the accused to provide a screen capture of his or her LinkedIn profile to prove that the erroneous job title had been removed.
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