Through a Freedom of Information request coursed by The Canadian Press
through the federal government, it was revealed on Monday (February 29) that several Ontario brokers have been cited by the FSCO for fraud last year.
In a Financial Post
report, the investigation yielded complaints filed to the FSCO, which regulates brokers in Ontario, by the public between January 1 and July 3, 2015.
On at least three separate instances, unscrupulous individuals posed as brokers and provided mortgage brokerage services without licenses.
Another broker arranged multiple loans via the use of falsified documents, while illicitly taking 10 to 50 per cent of the loaned amounts. Still another has been accused by investors of lying about the $1.5 million mortgage the latter have been funding; the investors have been informed that the mortgage was the first loan on the property, instead of being the second as was actually the case.
The investigation came on the heels of a cloud of suspicion cast over the mortgage broker industry. Last year, premier lender Home Capital terminated its relationships with 45 fraudulent brokers who used false income information, and together have amassed $1.72 billion in outstanding loans.
Other industry players welcomed these developments, saying that these would end up raising standards.
“There’s always enough business out there, you just have to work a little harder to drum it up,” Hamilton broker and author Blair Anderson said, adding that tighter economic conditions do not excuse unethical behavior.
Regulatory body Mortgage Professionals Canada assured the public that the proportion of erring brokers remains miniscule compared to the more than 25,000 licensed professionals scattered across multiple markets.
Over 2,400 licensed mortgage brokers were operating in Ontario alone as of 2014, according to the FSCO.