Compliance order issued after firm operated without a licence since 2014
The Financial Services Regulatory Authority of Ontario (FSRA) has issued a compliance order and $15,000 administrative penalty against Razer Capital Corporation for administering mortgages without a licence, in violation of Ontario’s Mortgage Brokerages, Lenders and Administrators Act, 2006.
The regulator found that Razer Capital, whose mortgage administrator licence was surrendered in 2014, had continued to carry on mortgage administration activities without proper authorization. Under section 5(2) of the Act, entities must be licensed to receive borrower payments and remit funds to lenders on their behalf.
“Razer Capital engaged in the business of mortgage administration by receiving payments under numerous mortgages on behalf of lenders and remitting payment to the lenders,” FSRA said.
According to FSRA’s notice of proposal, the unlicensed activities came to light following an April 2023 complaint. The complainant alleged Razer Capital had acted as a mortgage administrator without a licence in relation to their loan. During subsequent litigation, Razer Capital’s president and sole director, Brian Pomer, submitted a sworn affidavit confirming the company’s role in administering mortgage payments.
Pomer stated that Razer Capital had debited borrower accounts and transferred monthly interest payments to private lenders. These activities occurred between January 2020 and October 2023 and aligned with mortgage arrangements facilitated through the brokerage that sponsored Pomer's mortgage agent licence.
Although Razer Capital did not dispute FSRA’s findings or request a hearing before the Financial Services Tribunal, the regulator proceeded with enforcement based on clear evidence.
“The percentage of loans in the foreclosure process rose to 0.49%, up four basis points from the prior quarter and three points higher than one year ago,” FSRA noted.
Read next: FSRA introduces new Continuing Education requirements for agents and brokers
In determining the penalty amount, FSRA considered the intentional nature of the breach. The agency cited Razer Capital and Pomer’s past licensure and familiarity with regulatory requirements, concluding the violation was committed knowingly.
“By carrying on business as an unlicensed mortgage administrator, Razer Capital evaded ongoing licensing suitability assessment by the regulator and deprived its borrower and lender clients of the protections provided under the Act,” FSRA stated.
While no remedial action was noted, FSRA found that Razer Capital earned indirect compensation through administration fees tied to transactions arranged via third-party lenders.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
