FSRA proposes $85K in penalties against Ontario family brokerage
The action stems from a 2024 transaction that regulators say left a borrower facing a product she never requested, could not afford, and that contained falsified income documentation.
The $900,000 mortgage she didn’t want
The borrower, identified in FSRA documents only as HM, approached K. Banx seeking a mortgage of between $150,000 and $200,000 to consolidate debts and provide a financial safety net.
According to the regulator, the brokerage instead presented her with a $900,000, one-year term mortgage at an interest rate of 6.89%, replacing two existing mortgages held with a major financial institution at rates of 6% and 4.79%.
Including fees, FSRA says the Annual Percentage Rate (APR) of the proposed product was 11.78%, with an additional discharge penalty of approximately $17,000. The borrower cancelled directly with the lender shortly after signing, and the mortgage was never funded.
FSRA further alleges the application submitted to the lender contained inflated T4 employment income, altered tax slips, and fictitious rental income of $2,300 per month — none of which the borrower says she reported.
