The move would have big implications for Ontario agents and brokers
New measures proposed by Ontario’s financial services watchdog could see mortgage brokers and agents in the province required to strengthen document and identity verification as the regulator cracks down on mortgage fraud.
The Financial Services Regulatory Authority of Ontario (FSRA) said on Tuesday that it was holding new consultations on guidance for brokers, agents, brokerages and administrators licensed with the body to prevent fraudulent practices within the brokering sector.
That announcement comes against a backdrop of escalating title and mortgage fraud in the province and across the country, with title insurer FCT noting last month that at least one attempted title fraud had taken place every four business days in Canada to date in 2023.
FSRA’s executive vice president for market conduct Huston Loke said it had taken the decision to strengthen its proposed guidance on the detection and prevention of mortgage fraud after receiving input from stakeholders during its public consultation at the end of 2021.
Changes to the proposed guidance, the watchdog said, would include extra content on the duty to verify documents and identities, put in place adequate anti-fraud policies and procedures, and clarify the role of principal brokers – and principal representatives at administrators – in identifying and preventing fraud.
FSRA said enforcement action would be on the table against licensed brokers, agents, brokerages and administrators for failing to comply with regulations, and noted its authority to regulate and sanction those individuals and entities.
The consultation period for the proposed guidance, which is available on FSRA’s website, is open until April 26.