Two Ontario Brokerages Were Suspended: How to Check Who You Are Dealing With

What FSRA announced

Ontario's mortgage regulator has suspended two brokerages while it pursues enforcement action. According to Canadian Mortgage Trends, the Financial Services Regulatory Authority of Ontario (FSRA) said the two companies are not authorized to deal or trade in mortgages while the interim suspensions remain in effect.

The suspensions have been extended until the Financial Services Tribunal concludes a hearing requested by the companies and two individuals named in the action. FSRA is seeking to revoke the brokerage licences held by the two companies, and is proposing to refuse to renew the licences of the two individuals. It is also proposing a $50,000 administrative penalty against one of them.

According to the same report, the allegations include failing to assist with an inquiry, hindering or obstructing the regulator and providing false or misleading information, as well as failing to assess the suitability of a mortgage, failing to disclose material risks and failing to provide proof of errors and omissions insurance. Separate allegations involve acting without a required licence, an undisclosed conflict of interest and failing to remit payments to or on behalf of a borrower.

Why this is worth a few minutes of your time

A mortgage application asks for a lot: your identity documents, tax records, bank statements, employment details and often a gift letter or business financials. We covered what lenders look for in files in why mortgage files stall over paperwork. All of that lands with whoever you choose to work with, and the money flowing through a purchase is large and, once spent, hard to recover.

Most brokers are doing everything properly. But a short verification step costs you almost nothing and is worth doing whether you found someone through a friend, an online ad or a referral.

How to check a licence

FSRA says the public can confirm that a mortgage brokerage, administrator, agent or broker is licensed in Ontario. Its public listing can be searched by licence number, last name or city, and FSRA publishes the licensed-mortgage-brokering data on its open data page. Its consumer guidance on mortgage brokering explains what the regulator oversees.

• Ask for the licence number. A licensed professional will give it to you without hesitation, and it should appear on their site and materials. Ours is shown in the footer of every page on this website.
• Look it up yourself. Do not rely on a number someone reads back to you. Search FSRA's listing and check that the name, the brokerage and the licence status match.
• Check the brokerage, not just the individual. A person works under a licensed brokerage, and both should appear.
• Be cautious about anyone who cannot be found. FSRA notes it cannot protect you if you obtain a mortgage through unlicensed individuals or companies.

Questions worth asking beyond the licence

A licence tells you someone is allowed to do the work. The allegations FSRA has described point to the other half: how the work is done. These are reasonable questions to ask any broker:

• How do you decide what is suitable for me? A good answer refers to your goals, your budget and your timeline, not only to one lender's product.
• What are the risks of what you are recommending? A broker should be able to explain the trade-offs plainly, such as penalties, qualifying limits and what happens at renewal.
• Do you carry errors and omissions insurance? It is a standard professional protection.
• Will I be asked to pay you or a third party directly, and when? Know where fees come from before you sign anything.
• Is there anyone else involved who benefits from this deal? Conflicts of interest should be disclosed, and a straight answer is a good sign.

On pricing, be wary of comparing only headline numbers, which we explained in the headline-pricing mistake. The same applies to private lending, where the regulator has flagged concerns. See what FSRA has been finding in private mortgages.

Warning signs at any stage

• Pressure to sign or commit quickly, or to move money before documents are in place.
• A request to leave something out of your application, or to describe your income or purpose differently from the facts. Misrepresentation on a mortgage application can have serious consequences.
• Vague or shifting answers about who the lender is or what you will pay.
• Reluctance to put the terms of the arrangement in writing.

If something feels wrong, stop and ask. A reputable broker will welcome the scrutiny. If you have a concern about a licensed professional, FSRA is the body that handles complaints.

About us

Stephen Green is a licensed Ontario Mortgage Broker with nearly thirty years in Canadian financial services. You can read more on the About page, and see the answers to common questions on our FAQ page. We would rather you verify us than take our word for it.