FSCO has recently received a number of complaints about illegal mortgage brokering ads and, in response, it has issued an official warning.
“Under Ontario’s Mortgage Brokerages, Lenders and Administrators Act, 2006, all mortgage brokerages, brokers and agents must prominently disclose the name in which they are licensed and their licence number in all public relations materials, including ads,” an official release from FSCO states. “Ads for mortgage brokers and agents must also include the name and licensing information for the brokerage they are affiliated with.”
The statement links to a page
with examples of illegal brokering ads.
The commission also mentions unlicensed companies who advertise private mortgages.
“In addition, private lenders for mortgages are prohibited from advertising their services. Only the licensed mortgage brokerage that they do business with can advertise,” the release states. “FSCO is warning consumers not to do mortgage brokering business with individuals and companies that advertise illegally.”
This sort of advertising is against regulations, according to the Mortgage Brokerages, Lenders and Administrators Act, 2006 2 (1) which states that anyone doing the following is considered to be “dealing in mortgages”:
1. Soliciting another person or entity to borrow or lend money on the security of real property.
2. Providing information about a prospective borrower to a prospective mortgage lender, whether or not this Act governs the lender.
3. Assessing a prospective borrower on behalf of a prospective mortgage lender, whether or not this Act governs the lender.
4. Negotiating or arranging a mortgage on behalf of another person or entity, or attempting to do so.
5. Engaging in such other activities as may be prescribed. 2006, c. 29, s. 2 (1)