FSCO issues orders for $1.1 million in administrative monetary penalties
Reminds consumers about the risks of syndicated mortgage investments
TORONTO, Feb. 2, 2018 /CNW/ - The Superintendent of Financial Services has issued orders (linked below) following a complex and detailed investigation by the Financial Services Commission of Ontario (FSCO). The orders were issued, pursuant to a settlement, against eight parties that were involved with syndicated mortgage investments for real estate development projects in Ontario and elsewhere in Canada for which Fortress Real Developments Inc. was a developer or development consultant. (Fortress Real Developments Inc. is not a mortgage brokerage or administrator and is not a party to the settlement or the subject of any of the orders.)
The orders provide that the following four brokerages will pay a combined total of $1.1 million in administrative monetary penalties on consent:
- Building Development and Mortgages Canada Inc., formerly known by the name Centro Mortgage Inc.
- FFM Capital Inc.
- FMP Mortgage Investments Inc.
- FDS Broker Services Inc.
The orders also provide that the mortgage brokerage or broker licences of the following, as applicable, are revoked on consent, requiring them to stop all mortgage brokering business immediately:
- Building Development and Mortgages Canada Inc.
- Vince Petrozza
- Rosalia Spadafora
- Michael Daramola
- Glenn May-Anderson
Ildina Galati-Ferrante, Principal Broker of Building Development and Mortgages Canada Inc. (BDMC), has surrendered her broker licence, requiring her to cease all mortgage brokering activities.
In addition, the mortgage administrator for these syndicated mortgage investments, BDMC, has voluntarily agreed that its mortgage administration functions for existing syndicated mortgage investments in real estate development projects for which Fortress Real Development Inc. is a developer or development consultant will be managed by a new arms-length administrator, FAAN Mortgage Administrators Inc., which will conduct business in BDMC's name. The new administrator will be in contact with all syndicated mortgage lenders/investors in the coming weeks.
FSCO is committed to protecting consumers in the sectors it regulates, including mortgage brokering. FSCO considers syndicated mortgages investments to be high risk, and notes they may not be suitable for the average lender or investor. Potential lenders or investors, including consumers and retail investors, are strongly encouraged to seek independent financial and legal advice before lending money through, or investing in, a syndicated mortgage. FSCO does not have the authority to offer restitution for any financial losses related to investments or its enforcement actions.
Additional Resources
- Read FSCO's helpful tips for consumers on syndicated mortgage investments.
- File a complaint about a mortgage broker, agent, brokerage or administrator
- See all Enforcement Actions FSCO has taken in the mortgage brokering sector and other regulated sectors
- Check FSCO's website for up-to-date information about the licence status of your mortgage broker or agent.
SOURCE Financial Services Commission of Ontario
For media enquiries only, please contact: Malon Edwards, Financial Services Commission of Ontario, Telephone: 416-590-7536, Toll free: 1-800-668-0128, ext. 7795, Email: [email protected]
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