The Financial Services Commission of Ontario (FSCO) has suspended the operations and licences of three firms and agents specializing in syndicated mortgages because of their “systematic disregard” of basic consumer protection measures.

According to FSCO, Toronto-based Tier 1 Transaction Advisory Services Inc., Mississauga, Ont.-based Tier 1 Mortgage Corp. and Markham, Ont.-based First Commonwealth Mortgage Corp. have contravened the Mortgage Brokerages, Lenders and Administrators Act, 2006.

Tier 1 Transaction, while not a licensed mortgage broker, arranged and facilitated syndicated mortgage investment transactions for development projects that Tier 1 Mortgage and First Commonwealth Mortgage, both of which are mortgage brokerages, marketed and sold.

The regulator has ordered Tier 1 Transaction to cease and desist its operations for the following contraventions: soliciting persons or entities to borrow or lend money on the security of real property; providing information about a prospective borrower to a prospective lender; assessing prospective borrowers on behalf of prospective lenders; negotiating or arranging a mortgage on behalf of another person and entity; and/or provided fees and remuneration to licensed and unlicensed individuals.

Meanwhile, FSCO has suspended the licences of the mortgage brokerages, Tier 1 Mortgage and First Commonwealth Mortgage, due to several infractions, including failing to provide written disclosure of material risk; failing to disclose conflicts of interest; failing to ensure the suitability of such syndicated mortgage investments for investors; and providing false and misleading information.

FSCO’s examinations found the brokerages’ contraventions of mortgage legislation to be “widespread and reveal systematic disregard for the basic consumer protection measure set out in the Act.”

In addition, FSCO suspended the licences of Jude Cassimy and Dave Balkissoon, who are the principal mortgage brokers, of First Commonwealth and Tier 1 Mortgage, respectively. Bhaktraj Singh, a licenced mortgage agent and a director, officer and sole shareholder of Tier 1 Transaction, has also had his license suspended.

These individuals have 15 days to request a hearing before the Financial Services Tribunal. The orders may become permanent if they fail to make such a request within the given time frame.

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