IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006,
S.O. 2006, c.29, as amended (the “Act”), in particular sections 35, 38 and 39;

AND IN THE MATTER OF Millicent Prince.

NOTICE OF PROPOSAL TO ISSUE A COMPLIANCE ORDER AND
TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Millicent Prince

TAKE NOTICE THAT pursuant to section 35 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Director, Litigation and Enforcement, (the “Director”) is proposing to issue a compliance order requiring Millicent Prince to:

TAKE NOTICE THAT pursuant to section 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose administrative penalties in the total amount of $10,000 on Millicent Prince as follows:

Details of these contraventions and reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing.

SI VOUS DÉSIREZ RECEVOIR CET AVIS EN FRANÇAIS, veuillez nous envoyer votre demande par courriel immédiatement à: contactcentre@fsrao.ca.

YOU ARE ENTITLED TO A HEARING BY THE FINANCIAL SERVICES TRIBUNAL (THE “TRIBUNAL”) PURSUANT TO SECTIONS 35(3), 35(4), 39(2) AND 39(5) OF THE ACT. A hearing by the Tribunal about this Notice of Proposal may be requested by completing the enclosed Request for Hearing Form (Form 1) and delivering it to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you. The Request for Hearing Form (Form 1) must be mailed, delivered, faxed or emailed to:

Address:  
Financial Services Tribunal
25 Sheppard Avenue West, 7^th Floor Toronto, Ontario
M2N 6S6

Attention: Registrar

Fax: 416-226-7750

Email: contact@fstontario.ca

TAKE NOTICE THAT if you do not deliver a written request for a hearing to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you, orders will be issued as described in this Notice of Proposal. TAKE FURTHER NOTICE of the payment requirements in section 4 of Ontario Regulation 192/08, which state that the penalized person or entity shall pay the penalty no later than thirty (30) days after the person or entity is given notice of the order imposing the penalty, after the matter is finally determined if a hearing is requested or such longer time as may be specified in the order.

For additional copies of the Request for Hearing Form (Form 1), visit the Tribunal’s website at www.fstontario.ca

The hearing before the Tribunal will proceed in accordance with the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal (“Rules”) made under the authority of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended. The Rules are available at the website of the Tribunal: www.fstontario.ca. Alternatively, a copy can be obtained by telephoning the Registrar of the Tribunal at 416-590-7294, or toll free at 1-800-668-0128 extension 7294.

At a hearing, your character, conduct and/or competence may be in issue. You may be furnished with further and or other particulars, including further or other grounds, to support this proposal.

REASONS FOR PROPOSAL

I. INTRODUCTION

1. These are the reasons for the proposal by the Director to make a compliance order against Millicent Prince (“Prince”) and to impose administrative penalties in the total amount of $10,000 on Prince.



II. BACKGROUND

A. FSRA Licensing History

2. Prince was licensed as a mortgage agent under the Act (licence #M14001880) from October 27, 2014 to March 8, 2022, when their licence was revoked after a hearing before the Financial Services Tribunal (the “Tribunal”).


3. Following the revocation, Prince appealed the Tribunal’s Decision (the “Decision”) to the Divisional Court and applied for a stay of the Decision pending disposition of the appeal.


4. The Divisional Court refused the stay on June 21, 2022 and dismissed the appeal on May 16, 2023.


5. Prince is currently not licensed under the Act and has not been licensed since March 8, 2022.



B. Prince’s Revocation Proceedings

6. In accordance with the Decision, FSRA revoked Prince’s mortgage agent licence by Order on March 10, 2022.


7. FSRA proposed to revoke Prince’s licence based on a reasonable belief that Prince was not suitable to be licensed as a mortgage agent due to Prince’s past conduct, false statements on three renewal applications, and misleading FSRA investigators.


8. Prince requested a hearing and was represented by legal counsel throughout the proceedings before the Tribunal.


9. In its Decision, the Tribunal found that Prince had engaged in a repeated pattern of dishonesty dating back to Prince’s time as a real estate agent up to the time of the hearing. The Tribunal found that Prince’s dishonesty included failure to disclose the revocation of a real estate agent licence and previous criminal history to FSRA, as well as providing FSRA will false information during its investigation.


10. The Tribunal concluded that there were reasonable grounds to believe that Prince would not deal or trade in mortgages with integrity and honesty.


11. The Tribunal also determined that revocation of the licence was the only appropriate penalty to ensure public protection and directed FSRA to carry out the revocation.


12. On March 8, 2022, the Tribunal issued its Decision and sent it to both Prince’s counsel and FSRA’s counsel by email.


13. On March 10, 2022, FSRA issued an Order revoking Prince’s mortgage agent licence.


14. On March 21, 2022, FSRA served the order revoking Prince's licence on Prince by email, copying Prince's lawyer. FSRA received delivery confirmation to Prince's email address.


15. On March 29, 2022, Prince served a notice of appeal on FSRA appealing the Decision to the Divisional Court.


16. On April 10, 2022, Prince applied for a stay of the Decision to the Divisional Court. The motion for stay was heard on June 1, 2022. The stay was dismissed by the Divisional Court on June 21, 2022, with costs, and Prince’s counsel was notified via email on that date.


17. On May 16, 2023, the Divisional Court dismissed Prince’s appeal of the Decision, again with costs.



C. Prince’s Termination from Mortgage Architects

18. As of April 25, 2019, Prince was authorized to deal in mortgages on behalf of MA Mortgage Architects Inc. (“Mortgage Architects”, mortgage brokerage licence #12728).


19. As of February 11, 2022, Prince’s mortgage agent licence was suspended when Mortgage Architects terminated their contract with Prince due to Prince’s failure to notify them of the outstanding Notice of Proposal to revoke and pending Tribunal hearing decision.


20. As such, between February 11, 2022, when the licence was suspended, and March 8, 2022, when the licence was revoked, Prince was not sponsored by any other mortgage brokerage and therefore not authorized to deal in mortgages.



D. Unlicensed Activity

21. On January 16, 2023, FSRA received a complaint that Prince had worked on obtaining refinancing of the complainant’s mortgage after Prince’s licence was revoked.


22. The complainant alleged that Prince sent their mortgage application to a number of different lenders which made their credit rating fall and their interest rate “skyrocket.” The complainant also alleged that due to Prince’s delays with the application, they ended up having to stay with their original lender at a higher interest rate.


23. The complainant provided email correspondence detailing Prince’s dealings in mortgages on the complainant’s behalf as follows:
    
    

    Approved Appraisal Services

    1. March 9, 2022 – The complainant advised an appraiser from Approved Appraisal Services that the complainant was no longer working with their previous mortgage broker and asked how they can have their appraisal released to another lender.
    
    
    2. March 15, 2022 – One week after Prince licence was revoked, the complainant forwarded the appraiser’s email thread to Prince and Prince subsequently acknowledged receipt.
    
    

    Mortgage Architects’ Mortgage Application

    3. March 7, 2022 – The complainant provided their previous mortgage agent with pay stubs and an employment letter.
    
    
    4. March 9, 2022 – One day after Prince’s licence was revoked, the complainant forwarded the previous email to Prince. Minutes later, Prince responded by sending the complainant an email with a blank Mortgage Architects’ mortgage application attached.
    
    
    5. March 9, 2022 – A few hours later, the complainant sent Prince an email which stated “Please see attached, Application, Identification, HTC Renewal, Land Title search. Let me know what else you need from me, thank you.” [sic]. This email also contained the respective attachments.
    
    
    6. March 23, 2022 – The complainant responded to this email thread attaching another employment letter, and Prince immediately confirmed receipt.
    
    

    Community Trust Emails

    7. April 5, 2022 – Almost one month after the revocation and approximately one week after their notice of appeal of the Decision was filed, Prince sent an email to the complainant asking them to answer some questions from the lender, Community Trust.
    
    
24. In all email correspondence to the complainant, Prince’s email signature contained the words “Mortgage Agent”; Prince’s former licence number of “M14001880”; Prince’s phone number; and Prince’s email address of “mprincemortgage@gmail.com”. Prince did not identify an affiliated mortgage brokerage.


25. In addition to the email correspondence mentioned above, between February 15, 2022 and at least April 26, 2022, the complainant communicated with Prince via text messages which show Prince dealing in mortgages. The phone number for the text messages matches Prince’s phone number as listed in Prince’s email signature.


26. As of February 11, 2022, Prince ought to have been aware that their licence was suspended and, as of March 8, 2022, Prince ought to have been aware that they were no longer licensed to deal in mortgages.


27. At the very least, Prince was aware on March 29, 2022, when they served their notice of appeal of the Tribunal’s Decision on FSRA. The complainant was never advised that Prince was no longer licensed to deal in mortgages.



III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Dealing in mortgages when not licensed

28. Section 2(1)(4) of the Act provides that a person deals in mortgages in Ontario when they, among other things, negotiate or arrange a mortgage on behalf of another person or entity, or attempt to do so.


29. Section 2(3) of the Act provides that no individual shall deal in mortgages in Ontario for remuneration, whether direct or indirect, as an employee or otherwise, unless he or she has a mortgage broker’s or agent’s licence and is acting on behalf of a mortgage brokerage or is exempted from the requirement to have such a licence.


30. Section 17(3)(a) of the Act provides that a mortgage agent’s licence is suspended if the agent ceases to be authorized by their sponsoring mortgage brokerage to deal in mortgages on behalf of the brokerage.


31. The Director is satisfied that Prince contravened section 2(3) of the Act by attempting to negotiate a mortgage, arranging a mortgage, and dealing in mortgages for the complainant, as defined by section 2(1)(4) of the Act, while Prince’ licence was automatically suspended and after it was revoked.



B. Using the title of “mortgage agent” when not licensed

32. Section 11(5) of the Act prohibits the use of the title of “mortgage agent” unless licensed as a mortgage agent.


33. The Director is satisfied that Prince contravened section 11(5) of the Act by using the title of “mortgage agent” in their email correspondence to the complainant after their mortgage agent licence had been revoked.



IV. GROUNDS FOR ISSUING A COMPLIANCE ORDER

34. Section 35(1)(c) of the Act states that a compliance order may be imposed if the Director is of the opinion that a person or entity has committed any act or pursued any course of conduct that contravenes or does not comply with a requirement under the Act.


35. Prince has contravened the Act by dealing in mortgages, and holding themself out as doing so, after their licence was suspended and then revoked. Prince ought to have been aware that their licence was suspended on February 11, 2022 and revoked on March 8, 2022, and continued to deal in mortgages for the complainant well beyond those dates.


36. As per section 35(1)(c) of the Act, the Director is satisfied that the proposed order is necessary to remedy the situation of Prince dealing in mortgages by holding themself out as a mortgage agent after their licence was suspended and then subsequently revoked.


37. It is reasonable to infer that Prince assisted the complainant for Prince’s own financial benefit and would have been renumerated if the mortgage they attempted to arrange materialized.


38. The public may engage Prince to provide mortgage services under the misapprehension that Prince is licensed to do so, depriving individuals of the ability to rely on a suitable, licensed individual and posing public harm if the services are provided contrary to the requirements of the Act.


39. The requirement for licensing to deal in mortgages is essential to the integrity of the Act and its regime which operates to protect the public from fraudulent activity and misconduct.


40. Accordingly, the Director proposes to issue a permanent compliance order requiring that Prince cease dealing in and trading in mortgages and using the title of “mortgage agent”, contrary to the Act.



V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

41. The Director is satisfied that imposing administrative penalties on Prince under section 39 of the Act will satisfy one or both of the following purposes under section 38(1) of the Act:
    
    
    1. To promote compliance with the requirements established under the Act.
    
    
    2. To prevent a person or entity from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under the Act.
    
    


42. The Director is satisfied that administrative penalties in the total amount of $10,000 should be imposed on Prince as follows:
    
    
    1. an administrative penalty of $7,500 for dealing in mortgages without a mortgage broker or mortgage agent licence, contrary to section 2(3) of the Act; and
    
    
    2. an administrative penalty of $2,500 for using the title of “mortgage agent” while not licensed as a mortgage agent, contrary to section 11(5) of the Act.
    
    


43. In determining the amount of the administrative penalties, the Director has considered the following criteria as required by section 3 of Ontario Regulation 192/08:
    
    
    1. The degree to which the contravention or failure was intentional, reckless or negligent.
    
    
    2. The extent of the harm or potential harm to others resulting from the contravention or failure.
    
    
    3. The extent to which the person or entity tried to mitigate any loss or take other remedial action.
    
    
    4. The extent to which the person or entity derived or reasonably might have expected to derive, directly or indirectly, any economic benefit from the contravention or failure.
    
    
    5. Any other contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation of Ontario or of any jurisdiction during the preceding five years by the person or entity.
    
    
    
    


44. In respect of the first criterion, the Director is satisfied that the contraventions were intentional. Prince’s licence was suspended on February 11, 2022, when they lost their sponsoring brokerage. Prince’s licence was revoked on March 8, 2022, following a lengthy hearing before the Tribunal. Prince’s counsel was immediately notified, and the revocation order was served on Prince on March 21, 2022. At the very least, Prince was aware of the revocation as of March 29, 2022, when Prince served FSRA with a notice of appeal to the Divisional Court.


45. Prince’s licence was suspended when they began dealing with the complainant. Prince continued to deal in mortgages for the complainant and use the title of “mortgage agent” well beyond the revocation date.


46. In respect of the second criterion, there was direct harm as a result of Prince’s unlicensed activity. The complainant relied on Prince to arrange the refinancing which deprived the complainant of advice from a licensed mortgage agent and caused delays, ultimately forcing the complainant to return to their original lender at a higher rate.


47. Furthermore, by deceptively acting as a mortgage agent, Prince undermined the integrity of the licensing regime. Dealing in mortgages without a licence poses significant risk to the public as it removes the checks and balances that the regulatory framework establishes for the purpose of protecting the public. The public is entitled to have confidence that the licensing regime will only allow properly qualified and licensed agents to deal in mortgages.


48. In respect of the third criterion, the Director is not aware of Prince making any attempts to mitigate or take other remedial action.


49. In respect of the fourth criterion, the Director is not aware of any economic benefit derived by Prince from their activity with the complainant. However, it is reasonable to infer that Prince anticipated a fee would be paid if refinancing were successfully obtained.


50. In respect of the fifth criterion, the Director is aware of the contraventions and failures to comply by Prince that were the subject of the Notice of Proposal to Revoke and are outlined above.


51. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, August 10, 2023.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

Si vous desirez recevoir cet avis en français, veuillez nous envoyer votre demande par courriel immediatement a : contactcentre@fsrao.ca.