Regulator continues to crack down on syndicated mortgages

Regulator continues to crack down on syndicated mortgages

Regulator continues to crack down on syndicated mortgages The Superintendent of Financial Services issued a cease and desist order against Tier 1 Transaction Advisory Services Inc. It has also suspended the licenses of Tier 1 Mortgage Corporation, First Commonwealth Mortgage Corporation, Bhaktraj Singh, Jude Cassimy, and Dave Balkissoon for allegedly violating the Mortgage Brokerages, Lenders and Administrators Act, 2006 through the selling of a number of syndicated mortgages.

“The Financial Services Commission of Ontario (FSCO) believes these activities pose a risk to investors, lenders and borrowers. The entities named in the orders must immediately stop conducting any mortgage-related business,” FSCO said in an action notice. “They have 15 days to request a hearing before the Financial Services Tribunal. If they do not request a hearing within that time, the orders may become permanent.”

The statement comes following a number of claims brought forth against a developer that uses syndicated mortgages, Fortress Real Developments.

In late September, a claim was brought against Fortress Real Capital, Fortress Real Developments, Jawad Rathore, Vincenzo Petrozza, Empire Pace (1088 Progress), Olympia Trust Company and a number of other entities and individuals, including the appraiser responsible for valuing the development.

That suit was filed a month after it was reported two investors were suing Fortress Real Capital – among others – following the bankruptcy of the Maddy Collier Centre in Barrie.

Those cases are ongoing and are not related to the action notice for Tier 1 Mortgage et al.
  • Paul Redley 2016-10-26 10:08:40 AM
    Thank you MBN for publishing the FSCO cease and desist to Tier 1 Mortgage Corp. It appears that mortgage syndicators finally are exposed and need to adhere to the Rules of Conduct of the industry. The countless unsuspecting investors that rely on Brokers, Agents and others to supply them with true facts of their investments now have a voice. Appraisals as defined by the Appraisal Institute of Canada (AIC) is a "comprehensive valuation of the property". A Letter of Opinion of Value as defined by some mortgage syndicators is just that, a letter and not a true "valuation" of the real estate.
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  • Ron Butler 2016-10-26 10:35:42 AM
    An important step would be for our associations MPC and CMBA to step up and tell their memberships to cease and desist sending investors to the large development mortgage syndicators in exchange for referral fees. The future jeopardy to our whole channel's E&O insurance coverage requires action right now.
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