Ethical conduct often means saying no to unsuitable clients, broker warns, instead of pushing through with a mortgage
The conduct of Ontario agents and brokers in finding mortgage solutions for their clients is facing intense regulatory scrutiny – and in many cases borrowers have been steered into extremely unsuitable deals because of misleading or inaccurate advice, according to a Greater Toronto Area (GTA) broker.
Lakhvir Lall (pictured top), principal broker at ADMIRE Mortgage Group, said she agreed with the assessment of other established industry members that standards are too low across the profession, telling Canadian Mortgage Professional many agents and brokers are not acting with their clients’ best interests in mind.
“I’ve observed instances where real estate professionals allow buyers to sign complex, 50- to 100-page preconstruction contracts without explaining, without consulting a lawyer, or adequately explaining the terms,” she said.
“Similarly, in the mortgage sector, professionals sometimes disregard FSRA’s ‘suitability’ guidelines, pushing collateral products without proper disclosure or misrepresenting variable rates as static or adjustable. The potential for harm is even greater with private, MIC [mortgage investment corporation] mortgages, which can be very dangerous if the wrong product is offered.”
Rising interest rates and affordability challenges have seen mounting cost-of-living struggles for many Ontario homebuyers and owners in recent years, putting the conduct of brokers in their interactions with clients in the spotlight.
The province’s mortgage brokerage regulator, the Financial Services Regulatory Authority of Ontario (FSRA), has doubled down on its supervision of the sector, identifying suitability – whether the solution proposed by a broker is right for their client – as a key focus.
That’s sparked a renewed debate in the broker community about agent and broker standards across Ontario.
As mainstream lenders tighten criteria, Ontario's private mortgage market grew to 16.8% in 2023. FSRA's Antoinette Leung expects this trend to continue, keeping regulatory focus on the sector. https://t.co/zY1729tE5j
— Canadian Mortgage Professional Magazine (@CMPmagazine) June 23, 2025
'It's about protecting your integrity'
Lall said she had heard of a borrower specifically requesting a one-year term but being sold an alternative three-year closed mortgage of 7.25% at the end of last year – and now facing a $36,000 penalty if they break that contract.
Another recent example: a borrower in need of a short-term solution being sold a one-year closed MIC product with “exorbitant” fees, “even though more suitable and affordable MIC lenders were available for their B-side qualifications.”
An oft-overlooked consideration all agents and brokers should be keeping in mind, according to Lall, is the importance of saying no to clients when it’s clear they’re not a good fit for a mortgage.
That can often get lost, she said, when brokers and agents are grinding for business, especially in a down market like the one that’s prevailed since 2022.
“This often means having the courage to say no to deals that don’t align with ethical practices or to clients whose expectations are unrealistic or detrimental to a sound financial decision,” she said. “It’s about protecting your integrity and the long-term wellbeing of your clients.
“Because every client is not a client [right away]. Sometimes you need to do farming for these kinds of clients so in future, they will become your client forever by [you] advising ethically.”
Regulator crackdown on improper broker conduct continues
FSRA has launched a host of enforcement actions against brokerages and individuals accused of improper conduct in mortgage brokering and lending this year.
Lall said the actions of some mortgage professionals tarnish the reputation of the industry and negatively impact perceptions even of those who conduct their business in good faith.
“By upholding higher standards and being willing to say no when necessary,” she said, “we can collectively work towards restoring trust and ensuring the industry is seen as a reliable and ethical partner for clients.”
She also criticized lax standards among many realtors and said consumers have often been harmed across both the real estate and mortgage markets because individuals working within those industries have been too focused on a commission-driven mindset, overlooking clients’ suitability and best interests.
“While it can be challenging, learning to say ‘no’ is crucial for both professional integrity and client wellbeing,” she said. “Once adopted, this practice simplifies transactions and builds trust, leading to more ethical and successful outcomes for everyone involved.”
Tightening the requirements to become a realtor or mortgage agent or broker should also be on the table, according to Lall. “Both industries’ authorities need to be stricter in regards to issuing and renewing a licence,” she said.
“They need to serve the consumer who has no knowledge or some knowledge of the mortgage and real estate industries.”
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