FSRA imposes $25,000 in penalties after discovering fraudulent mortgage documents
Mortgage agent Avraj Singh Dulay has been penalized by Ontario’s Financial Services Regulatory Authority (FSRA) for fabricating 17 mortgage preapproval letters.
The letters, which falsely indicated that borrowers had secured mortgage preapprovals from a lender, were used to satisfy purchase agreements for preconstruction residential units.
The fraudulent documents were discovered in September 2022, when a developer inquired about the authenticity of the preapprovals. Mortgage Alliance investigated and found that Dulay had created the letters without the knowledge or consent of the brokerage or the lender. He was subsequently terminated by Mortgage Alliance and reported to FSRA.
During an interview with FSRA, Dulay admitted to creating the letters on Mortgage Alliance letterhead without authorization. He acknowledged that he bypassed proper procedures, stating that the preapprovals should have been processed through the lender.
FSRA found that Dulay’s actions violated section 43(2) of the Mortgage Brokerages, Lenders and Administrators Act, 2006, which prohibits the submission of false or deceptive mortgage documents.
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Additionally, FSRA determined that Dulay’s actions led to non-compliance within his brokerage. By failing to maintain proper records or provide documentation to Mortgage Alliance, he caused the brokerage to violate its record-keeping obligations under Ontario Regulation 188/08.
Mortgage Alliance confirmed that Dulay stored client information in emails and WhatsApp messages, outside of the brokerage’s records and policies.
Following its investigation, FSRA imposed 18 administrative penalties totalling $25,000 on Dulay as part of a settlement agreement.
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