A Mississauga mortgage lender has been accused of operating his brokerage without a license and has been ordered to cease business immediately pending investigation.
Ralph Iacono‘s brokerage firm Mortgage Lenders Ltd. has been ordered by the Financial Services Commission of Ontario (FSCO) to stop issuing mortgages.
The government organization issued a temporary compliance order against Iacono and Mortgage Lenders Ltd., and one interim suspension order against Mortgage Lenders Ltd.
“We believe Mr. Iacono is dealing in business without a licence,” Senior communications officer Kristin Rose told YourMississaugabiz.com.
Ralph Iacono had his mortgage broker licence previously revoked by FSCO in December 2012.
FSCO is alleging that Iacono is in violation of that previous order that was issued due to evidence he was providing “false and misleading statements.” Rose said Iacono also failed to provide required disclosure to an investor, resulting in financial losses for the client.
The decision in December 2012 by superintendent of financial services, Philip Howell, also revoked the mortgage brokerage licence of Iacono’s Terra Nova Financial Services Inc.
Rose said there was evidence the other Mississauga brokerage was knowingly providing FSCO with “false and misleading statements,” failed to provide required disclosure to an investor leading to financial losses, and didn’t have errors and omissions insurance.
Currently, there are six licenced employees at Mortgage Lenders Ltd. However, as a result of the order, those brokers and agents can only contact their existing clients in order to transfer files to another business.
“Right now they are not authorized to transfer to another brokerage and work there until this matter is resolved,” Rose explained.
FSCO’s director of market regulation, Anatol Monid, said mortgages that have already been placed with Mortgage Lenders Ltd. are protected and secure with their lenders.
“But mortgage transactions that are underway will not be completed by these agents or brokers,” he said. “They must refer them to another licenced broker, agent or brokerage.”
A press release from FSCO stated the interim orders against Mortgage Lenders Ltd. and Mr. Iacono “will expire in 21 days if the Superintendent does not make a notice of proposal to make a permanent order in either matter.”
Offences under the Mortgage Brokerages, Lenders and Administrators Act (2006) can lead to serious penalties. Every individual convicted of an offence, including not complying with an interim order, is liable to a fine of up to $100,000, imprisonment for up to a year, or both. Corporations convicted of an offence under the Act are also liable to a fine up to $200,000.
The previous decision and licence revocation concerning Terra Nova Financial Services Inc. did not result in any fines.
Rose had strong cautionary words for the general public regarding FSCO’s findings. “They really should not be dealing with Mr. Iacono or Mortgage Lenders Ltd.,” she said. “If consumers are dealing with anyone that’s not a licenced broker or brokerage, they can’t be sure that any of those [Act’s] standards are in place and that does pose a very serious risk for them.”
Anyone who is concerned they are affected by the two FSCO orders are advised to contact the public inquiry hotline at 1-800-668-0128 or speak with their lender.