IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29, as amended (the “Act”), in particular sections 16, 21, 38, and 39;

AND IN THE MATTER OF Aid Almusri

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I – INTRODUCTION

Aid Almusri (“Almusri”) was licensed as a mortgage agent under the Act (licence # M21003430) from April 1, 2022, to March 31, 2023, when it expired.
Almusri applied to FSRA for the renewal of his mortgage agent licence on March 14, 2023.
At all material times, Almusri was authorized to deal and trade in mortgages by and on behalf of Mortgage Smart Inc. (“Mortgage Smart”), a mortgage brokerage licenced under the Act (licence # 12076).
Between January 2021 and December 2022, Almusri was associated with and/or employed at 2799953 Ontario Inc. operating as Canada’s Choice Capital (“CCC”), a corporation which provided home services and products.
On August 22, 2023, the Director, Litigation and Enforcement (the “’Director”), by delegated authority from the Chief Executive Officer (“CEO”) of the Financial Services Regulatory Authority of Ontario (“FSRA”), issued a Notice of Proposal in respect of Almusri, among others (the “NOP”), proposing to refuse to renew the mortgage agent licence issued to Almusri and impose administrative penalties on Almusri.
The NOP was delivered to Almusri on or around August 25, 2023. Almusri disputed the allegations in the NOP and on September 11, 2023, requested a hearing before the Financial Services Tribunal (the “Tribunal”) in respect of the NOP.
Almusri and the Director, by delegated authority from the CEO, (collectively the “Parties”) wish to resolve this matter on consent and without a hearing before the Tribunal.

PART II – AGREED FACTS

FSRA asserted certain facts with respect to the conduct of Almusri, as a mortgage agent licenced under the Act, in Part II of the NOP. FSRA alleged certain contraventions of the Act and its Regulations on the part of Almusri in Part III of the NOP.
Between December 2021 and February 2022, Almusri, while acting as a mortgage agent with Mortgage Smart arranged the following mortgages funded by private lenders (the “Mortgage Transactions”):
1. A $300,000 mortgage for RC and DC. RC was 75 years old, and DC was 71 years old at the time when the mortgage application for the mortgage was submitted. RC and DC were retired pensioners with a combined annual income of around $34,382.28. Their residential property was put forward as security. The transaction closed on February 9, 2022;
2. A $325,000 mortgage for MC. MC was 66 years old at the time when the mortgage application for the mortgage was submitted. MC was a retired pensioner with an annual income of around $16,162. Her residential property was put forward as security. The transaction closed on January 24, 2022; and
3. A $312,000 mortgage for GB. GB was 72 years old at the time when the mortgage application for the mortgage was submitted. GB was a retired pensioner with an annual income of around $33,000. His residential property was put forward as security. The transaction closed on January 14, 2022.
All of the abovementioned borrowers were referred by CCC to Mortgage Smart. CCC held one or more Notices of Security Interest on all of the properties put forward to secure the mortgages. All of the mortgages were for a term of one year with interest rates ranging from 5.45% to 7.49%. The APR on the total disclosed cost of borrowing ranged from 9.78% to 12.48%. The interest on the mortgages were deducted from the mortgage proceeds either as upfront payment or as an “interest reserve”.
Almusri did not confirm all the details in the borrowers’ application forms for their respective mortgages resulting in some inaccurate information being submitted to lenders.
FSRA received complaints from the clients regarding each of the Mortgage Transactions with respect to the conduct of Almusri and Mortgage Smart.
Almusri agrees to and admits as below with respect to each of the Mortgage Transactions:
1. Almusri failed to take reasonable steps to ensure that the mortgages he presented to his borrower clients were suitable for them, causing Mortgage Smart to contravene subsection 24(1) of Ontario Regulation 188/08.
2. Almusri failed to disclose in writing all the material risks associated with the Mortgage Transactions to his borrower clients, causing Mortgage Smart to contravene subsection 25(1) of Ontario Regulation 188/08.
3. Almusri failed to disclose in writing, his and Mortgage Smart’s relationship with CCC to his borrower clients, causing Mortgage Smart to contravene subsection 27(1) of Ontario Regulation 188/08.
4. Certain details in the application forms for the mortgages submitted by Almusri to lenders were inaccurate.

PART III – NON-COMPLIANCE WITH THE ACT

By engaging in the conduct described in Part II of these Minutes, Almusri admits and acknowledges that he breached the following provisions of the Act and its regulations:
1. section 3 of Ontario Regulation 187/08 by causing Mortgage Smart to contravene subsections 24(1), 25(1), and 27(1) of Ontario Regulation 188/08; and
2. subsection 43(2) of the Act.
In view of the above non-compliance, Almusri consents to the imposition of administrative penalties in the amount of $30,000 pursuant to section 39 of the Act. Almusri agrees to pay such administrative penalties.
Almusri further consents to the issuance of an order refusing to renew the mortgage agent licence issued to him, pursuant to sections 16 and 21 of the Act.

PART IV – TERMS OF SETTLEMENT

Almusri agrees to the facts stated in Part II of these Minutes and admits to the contraventions stated in Part III of these Minutes.
Almusri acknowledges and agrees that he has been given the opportunity to seek independent legal advice and he has done so (or has waived the right to do so) and is entering into these Minutes of Settlement voluntarily, understanding the consequences of doing so.
Almusri acknowledges that these Minutes are an undertaking within the meaning of the Act, and that failure to comply may result in immediate regulatory action including, but not limited to, the issuance of a Notice of Proposal to revoke the licence, a Notice of Proposal to impose an administrative penalty, or a prosecution under the Provincial Offences Act.

(a) Issuance of Orders

Almusri acknowledges that, upon execution of these Minutes by both Parties, the orders attached as Schedule “A” to these Minutes (the “Orders”) will be issued.

(b) Process for Execution of Settlement

Almusri acknowledges that these Minutes are not binding on the Director until signed by the Director.
These Minutes may be executed in counterparts and may be executed and delivered by facsimile or e-mail, and all such counterparts and facsimiles or e-mails, as applicable, shall together constitute one and the same agreement.
Upon receiving an executed copy of these Minutes from FSRA, Almusri will withdraw his Request for Hearing (Form 1) in respect of the NOP before the Tribunal by completing a Withdrawal/Discontinuance (Form 5) and filing it with the Registrar at the Tribunal within two (2) business days.
Upon confirmation from the Tribunal that the Request for Hearing has been withdrawn and the hearing has been cancelled, the Parties agree that the Director will issue Orders in the form attached as Appendix “A” to these Minutes.
The Parties accept and understand that these Minutes and any rights within the Minutes shall enure to the Parties and to any successors or assigns of the Parties.

(c) Disclosure of Minutes and Orders

The Parties will keep the terms of these Minutes and the Orders confidential until the Orders are issued, except that:
1. The Director shall be permitted to disclose the Minutes and the Orders within FSRA; and
2. The Parties shall be permitted to inform the Financial Services Tribunal.
If either of the Parties do not sign these Minutes or the Director does not issue the Orders:
1. These Minutes, the Orders, and all related discussions and negotiations will be without prejudice to FSRA and Almusri; and
2. FSRA and Almusri will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the NOP. Any proceedings, remedies and challenges will not be affected by these Minutes, the Orders, or any related discussions or negotiations.
Upon issuance of the Orders:
1. Almusri agrees that these Minutes and the Orders form part of his administrative record for the purposes of any future licensing decision or as an aggravating factor in respect of a future administrative penalty or prosecution against them or any affiliated entities;
2. Almusri acknowledges that these Minutes and the Orders are public and will be published by FSRA on its public website (or that of its successor) along with a press release that summarizes these Minutes and the Orders; and
3. The Parties agree not to make representations to any member of the public or media or in a public forum that are inconsistent with these Minutes or the Orders.

(d) Further Proceedings

Whether or not the Orders are issued, Almusri will not use, in any proceeding, these Minutes or the negotiation or process of approval of these Minutes as the basis for any attack on FSRA’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may be available.
Upon issuance of the Orders:
1. Almusri waives all rights to a hearing before the Tribunal regarding the NOP;
2. Almusri waives all rights to a judicial review or appeal of the Orders;
3. The Director agrees that FSRA will not take any further proceedings against Almusri arising solely from the facts contained in Part II of these minutes, unless facts not disclosed by Almusri come to the attention of FSRA that are materially different from those the facts contained in Part II of these minutes or Almusri fails to comply with any term in the Orders; and
4. Almusri agrees that should he fail to comply with any term in these Minutes or the Orders, FSRA is entitled to bring any proceedings available to it.

DATED at February 27, 2024, Ontario

Original signed by

Aid Almusri

DATED at February 27, 2024, Ontario

Original signed by

Sawsan Al-Masri
Name of Witness

DATED at Toronto, Ontario, March 4, 2024

Original signed by

Elissa Sinha
Director, Litigation and Enforcement
Financial Services Regulatory Authority of Ontario

By delegated authority from the Chief Executive Officer

APPENDIX A

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29, as amended (the “Act”), in particular sections 16, 21, 38, and 39;

AND IN THE MATTER OF Aid Almusri

ORDER TO IMPOSE ADMINISTRATIVE PENALTIES

Aid Almusri (“Almusri”) was licensed as a mortgage agent under the Act (licence # M21003430). Almusri’s licence expired on March 31, 2023. Almusri applied to FSRA for the renewal of his mortgage agent licence on March 14, 2023.

On August 22, 2023, by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (“FSRA”), the Director, Litigation and Enforcement (the “Director”) issued a Notice of Proposal proposing to, among other things, impose administrative penalties on Almusri for contravening section 3 of Ontario Regulation 187/08 by causing his mortgage brokerage to contravene sections 24(1), 25(1), and 27(1) of Ontario Regulation 188/08, and sections 43(2) and 45(1) of the Act (the “Notice of Proposal”).

The Notice of Proposal was delivered to Almusri on or around August 25, 2023. A Request for Hearing (Form 1) dated September 11, 2023, was delivered to the Financial Services Tribunal (the “Tribunal”), in accordance with section 39(5) of the Act respecting the Notice of Proposal.

On [TBD], Almusri withdrew the Request for Hearing and on [TBD] the Tribunal closed its file with respect to the matter. This order is made pursuant to a Minutes of Settlement and Undertaking (the “Minutes”) entered into by Almusri and the Director on [TBD].

ORDER

Administrative penalties in the amount of $30,000 is hereby imposed on Aid Almusri (“Almusri”), for the reasons set out in the Minutes of Settlement dated TBD.

TAKE NOTICE THAT the Financial Services Regulatory Authority of Ontario (“FSRA”) will deliver an invoice to Almusri with information as to where and how to make the payment.

If Almusri fails to pay the administrative penalty in accordance with the terms of this Order and any further agreement or undertaking, the Chief Executive Officer may file the Order with the Superior Court of Justice and the Order may be enforced as if it were an order of the court. An administrative penalty that is not paid in accordance with the terms of an order imposing the penalty is a debt due to the Crown and is enforceable as such.

DATED at Toronto, Ontario,

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29, as amended (the “Act”), in particular sections 16, 21, 38, and 39;

AND IN THE MATTER OF Aid Almusri

ORDER TO REFUSE TO RENEW LICENCE

ORDER

The application to renew the mortgage agent licence (licence # M21003430) issued to Aid Almusri is hereby refused for the reasons set out in the Minutes of Settlement dated [TBD].

DATED at Toronto, Ontario,

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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