Regulator says individual dealt in mortgages without a licence and carried on business as an unlicensed lender
Ontario’s financial services regulator has launched enforcement proceedings against Andrew White for allegedly operating without the required licences.
In a notice of proposal issued this week, the Financial Services Regulatory Authority of Ontario (FSRA) alleged that White contravened the Mortgage Brokerages, Lenders and Administrators Act, 2006.
According to FSRA, White dealt in mortgages without a licence, contrary to section 2(3) of the Act, and carried on business as an unlicensed mortgage lender, contrary to section 4(2).
The proposal indicates that White’s licence was never renewed after expiry on March 31, 2020, and that he tried to renew but his brokerage withdrew the sponsorship.
He is currently licensed as a life insurance and accident & sickness insurance agent, FSRA said. According to its proposal, a consumer sought mortgage financing on his home in 2022 and was connected to White by a friend who had worked with White to get a mortgage for his own home.
White allegedly introduced himself to the consumer as a mortgage broker, and the consumer – called AC in FSRA’s enforcement action – reportedly understood that White had access to private lenders who could help with a mortgage.
The terms of first and second mortgages for AC through his friend were discussed by White, FSRA said, including confirming the monthly payment amount and interest deferral.
White spoke with a director of a private lending company about loaning money on AC’s property, according to FSRA, and presented the private lender with the terms of the mortgage for the property.
The company then loaned the money for a first mortgage to AC, with the private lender director understanding White to be a mortgage broker. White also allegedly assisted AC with a second mortgage on the property, and that mortgage was held by a trust company as a trustee.
FSRA said that White advanced $10,000 of the $190,000 second mortgage. The balance was advanced by another private lender through the trust company, and a lender fee of $9,200 was paid to Great White – the company owned by White – with White ultimately receiving the money himself.
Before the second mortgage expired, AC contacted white about renewing the mortgage, which White agreed to extend, FSRA said. According to the regulator’s notice, White told AC that the cost for a mortgage statement would be $1,975.
A renewal letter was sent to AC from Great White that included terms to renew the mortgage, FSRA said, and White followed up to confirm whether AC would be renewing when AC did not respond to the email.
AC ultimately defaulted on his mortgages, and the property went into a power of sale.
The regulator is seeking to impose two administrative penalties totalling $25,000.
White has requested a hearing before the Financial Services Tribunal regarding the proposal.
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