FSCO on private lenders

FSCO on private lenders

FSCO on private lenders After a slew of warnings about unlicensed private mortgage companies, FSCO has clarified the rules governing how these companies advertise.

“Private lenders for mortgages are prohibited from advertising their services,” FSCO said in an official release. “Only the licensed mortgage brokerage that they do business with can advertise.”

FSCO has issued a number of industry warnings about unlicensed companies who advertise mortgages directly to consumers – even if they work with licensed brokers.

One industry professional recently explained a warning that his company received.

"It's incorrect. When you go to our website, when it says who we are and what we do it doesn't say we're mortgage brokers ... it says we are consultants who refer to professionals; we are not brokers," Mustafa Brown, operating manager of S.S.F Consultants told MortgageBrokerNews.ca. "FSCO's issue was that the website mentioned mortgages but we took out any mention of mortgages."

That stance was published in a separate warning about illegal mortgage ads.

“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,” the regulator said. “Ads for mortgage brokers and agents must also include the name and licensing information for the brokerage they are affiliated with.”