In a newsletter to mortgage professionals, the Financial Services Regulatory Authority of Ontario highlighted heightened conduct and compliance risks in Ontario's mortgage market and restated key expectations under the Mortgage Brokerages, Lenders and Administrators Act. The update warns that involvement in promoting, issuing or facilitating promissory notes can expose licensees to action by both the Ontario Securities Commission and FSRA, while poor supervision, unsuitable private mortgage recommendations and other compliance failures can harm consumers and put licences at risk. FSRA said holding a mortgage agent or broker licence does not permit a person to lend money or conduct transactions outside a licensed mortgage brokerage unless the party is exempt. Principal brokers and brokerage leadership are expected to actively oversee agents' and brokers' concurrent business activities, including mortgage administration or investment-related ventures, because unmanaged outside activities can create conflicts of interest, supervisory gaps and contraventions under the MBLAA. The newsletter also reiterates that private mortgages should be supported by a realistic exit strategy, lenders' source of funds should be verified, and all fees should be clearly disclosed and accurately labelled. It also warns against misrepresenting documents, routing mortgage-related funds through personal accounts and other shortcuts taken to expedite transactions. Separately, FSRA said a redesigned Annual Information Return is planned for 2027, with a shorter questionnaire and a guide offering practical filing support and answers to common questions.
Financial Services Regulatory Authority of Ontario2026-06-11
Financial Services Regulatory Authority of Ontario warns mortgage professionals on promissory notes private lending and oversight failures
In a newsletter to mortgage professionals, the Financial Services Regulatory Authority of Ontario reiterated that dealings in promissory notes, transactions outside a licensed brokerage and weak oversight of outside business activities can trigger action under the Mortgage Brokerages, Lenders and Administrators Act and, where securities issues arise, by the Ontario Securities Commission. It also restated expectations for private mortgages on suitability, exit strategies, source-of-funds checks and fee disclosure, and said a redesigned Annual Information Return is planned for 2027.