The allegedly falsified mortgage documents are tied to 17 property deals
Ontario's Financial Services Regulatory Authority (FSRA) has taken enforcement action against Avraj Singh Dulay, accusing the mortgage agent of fabricating 17 mortgage preapproval letters without the knowledge or consent of his brokerage, Mortgage Alliance.
Dulay faces $44,000 in administrative penalties for falsifying documents related to several property transactions – a violation of section 43(2) of the Mortgage Brokerages, Lenders and Administrators Act, according to FSRA’s notice of proposal.
The fabricated preapproval letters were used in 17 potential mortgage transactions and presented to a developer. The letters falsely indicated that prospective homebuyers had received mortgage preapprovals from a specific lender.
Dulay admitted to creating the preapproval letters on Mortgage Alliance letterhead without the company's knowledge or consent. He also confirmed that the lender listed on the letters had not provided any preapproval for the purchases in question.
Mortgage Alliance became aware of the issue on September 1, 2022, after receiving an inquiry from a developer of preconstruction units seeking to verify the legitimacy of the mortgage preapproval letters. Following an internal investigation, the company terminated Dulay's employment and reported the matter to FSRA.
The letters were tied to agreements of purchase and sale for residential units in a new housing development, where the buyers were required to provide proof of mortgage preapproval to the developer. Dulay’s fabricated letters falsely fulfilled that requirement.
FSRA alleged that Dulay's actions caused his brokerage, Mortgage Alliance, to fail to comply with its regulatory requirements.
Dulay did not maintain proper records of the transactions and stored client documents through personal email and WhatsApp messages, bypassing Mortgage Alliance's required documentation protocols. This non-compliance with the brokerage’s policies violated section 3 of Ontario Regulation 187/08.
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Dulay was initially licensed as a mortgage agent in September 2018, but his license expired in March 2023. At the time of the violations, Dulay was conducting business on behalf of Mortgage Alliance.
FSRA noted that there is no evidence that Dulay attempted to mitigate any loss or took remedial action following the discovery of the fabricated documents. While Dulay could have expected to gain financially from these transactions if they had closed, FSRA did not find any other regulatory violations from Dulay within the past five years.
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