[AppraiserChat.com] London Free Press Allegations against mortgage brokerage shine harsh spotlight on sector

[Michael A. Roman]

Hi ,

https://lfpress.com/news/local-news/allegations-against-london-mortgage-brokerage-shine-spotlight-on-sector


> Allegations against mortgage brokerage shine harsh spotlight on sector
>
> A regulatory agency?s allegations of wrongdoing by a well
> established London mortgage brokerage raise larger questions about
> the sector, an industry expert says.
> Author of the article:
> Heather Rivers
> Published May 21, 2024  ?  Last updated 13 hours ago  ?  7 minute read
> Join the conversation
> Illustration of a mortgage broker
> (Getty Images)
> Article content
>
> A regulatory agency?s allegations of wrongdoing by a well
> established London mortgage brokerage raise larger questions about
> the industry, including how many other mortgages arranged by the
> company may have allegedly been compromised, an industry expert says.
>
> ?If it?s true, it?s hard to believe it?s a one-off,? says Cameron
> Field, a former Toronto police officer and vice-president with the
> Vidocq Group, a consulting firm that helps companies manage risk, including financial crime risk.
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>
> The Financial Services Regulatory Authority of Ontario (FSRA) said
> in a news release on May 7 it has started enforcement action against
> Forest City Funding Inc. and its principal broker William Handsaeme
> following a two-year investigation.
>
> The authority said Forest City Funding, a London mortgage
> brokerage, gave ?false or deceptive information and documents when
> dealing in mortgages,? contrary to the the Mortgage Brokerages, Lenders and Administrators Act.
>
> The company also is alleged to have acted ?when it ought to have
> known that by acting it was being used by a borrower to facilitate dishonesty,? the authority said.
>
> Handsaeme, identified by the authority as principal broker and sole
> director of Forest City Funding, is alleged to have caused the
> company to engage in the conduct the authority says violated the act.
>
> The authority is proposing fines of $100,000 against Forest City
> Funding and $10,000 against Handsaeme, who also faces a possible
> one-year suspension of his mortgage broker licence. The authority?s allegations have not been proven.
>
> Forest City Funding brokered 5,739 mortgages in 2022 worth more
> than $2 billion, the authority said. The company at 1 Commissioners
> Rd. East in London has been licensed since 2008.
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> The company sponsored nearly 350 full-time mortgage brokers and agents.
>
> The authority detailed the findings of its investigation in a
> notice of proposal dated Feb 9, 2024. 
>
> The authority said it reviewed five transactions in which Forest
> City Funding arranged the first mortgage and a company called
> Solidity Group was the lender for the second mortgage.
>
> In four of the five transactions, the authority said, the second
> mortgage was used to pay back supposedly ?gifted? down payments, a
> contravention of the terms of the first mortgage commitments.
>
> Bill Handsaeme
> Bill Handsaeme (Facebook)
>
> The allegations against Forest City Funding and Handsaeme have
> caused a stir in the mortgage industry. An insider said Forest City
> Funding is one of the largest brokerages in Canada and Handsaeme is
> a well-known mortgage broker with more than three decades of experience.
>
> The alleged violations by Forest City Funding ?are a really good
> snapshot of a growing and large fraud trend in Canada and that is mortgage fraud,? Field said.
>
> The alleged financial dishonesty raises big questions about any
> previous dealings Handsaeme has been involved in, he said.



Michael Roman
--
Michael A. Roman, CRA,P.App,FRI,PLE,CRF, Senior Appraiser
INHOUSE APPRAISAL CORPORATION
Real Estate Appraisal & Consultants
33 Ivan Road, Toronto, Ontario, Canada M1C 1V1
Phone: 416-282-4111
E-mail: maroman at ihac.com
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