Ex-Ontario Mortgage Broker Fined $600,000 Over Misconduct Charges The Financial Services Regulatory Authority of Ontario (FSRA) has fined Claire Drage, a former mortgage broker in Guelph, $600,000 for misconduct related to her work with real estate developers. The penalties, which consist of six administrative monetary sanctions, were imposed after Drage declined to request a hearing before the Financial Services Tribunal and did not challenge the proposed punishment. According to FSRA, Drage engaged in a prolonged pattern of misconduct that exposed investors to significant financial losses. The authority alleged that she failed to disclose material risks, conflicts of interest, and inaccurate valuations while brokering hundreds of mortgages and loans for a group of real estate developers. These actions led to the misrepresentation of mortgage suitability and the submission of incomplete or inaccurate application information. Drage’s activities contributed to the insolvency of the real estate investment companies she was associated with. These companies were granted protection under the Companies’ Creditors Arrangement Act in January 2024, leaving investors vulnerable to potential losses. FSRA emphasized that the misconduct not only violated Ontario provincial laws but also undermined consumer protection standards. Elissa Sinha, director of enforcement at FSRA, stated that licensed mortgage brokers must adhere to regulatory requirements to safeguard consumers. She noted that the authority will take action against licensees who put consumers at risk. The case highlights the consequences of failing to meet professional obligations in the mortgage industry.#financial_services_regulatory_authority_of_ontario #claire_drage #guelph #real_estate_developers #companies_credits_arrangement_act
FSRA hits former broker with $600,000 in penalties over investor harm The Financial Services Regulatory Authority of Ontario (FSRA) has imposed a $600,000 administrative penalty on former mortgage broker Claire Drage for orchestrating a years-long pattern of misconduct that led to significant financial losses for investors. The regulator detailed a case involving a failed rental portfolio in Northern Ontario, where Drage’s actions left investors exposed to severe risks. According to FSRA, Drage brokered hundreds of mortgages and loans for a group of related real estate companies known as the Balboa Companies, raising over $100 million from the public. These firms built a large portfolio of rental properties across Northern Ontario but became insolvent in January 2024, triggering a Companies’ Creditors Arrangement Act (CCAA) protection order. This insolvency left investors facing substantial losses, prompting FSRA to take action. Elissa Sinha, FSRA’s director of enforcement, emphasized that consumer protection is a priority, stating that licensed mortgage brokers must adhere to regulatory requirements. She noted that FSRA will not tolerate actions that expose consumers to harm. The regulator found that Drage failed to disclose critical risks and conflicts of interest, instead providing generic warnings rather than addressing specific credit concerns. Drage also allowed inflated or unsupported property valuations to be presented to investors, resulting in loan-to-value ratios that were significantly understated. FSRA alleged that she did not take reasonable steps to ensure mortgage suitability for either investors or the Balboa borrowers.#financial_services_regulatory_authority_of_ontario #claire_drage #balboa_companies #companies_creditors_arrangement_act #the_lion_s_share_group
