IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 14 and 21;

AND IN THE MATTER OF Harpinder “Nancy” Deol

NOTICE OF PROPOSAL TO REFUSE TO ISSUE LICENSE

TO: Harpinder “Nancy” Deol

TAKE NOTICE THAT pursuant to sections 14 and 21 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 & Enforcement (the “Director”) is proposing to refuse to issue a mortgage agent licence to Harpinder “Nancy” Deol.

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 21(2), 21(3), 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 reasons for the proposal by the Director to refuse to issue a mortgage agent license to Harpinder “Nancy” Deol (“Deol”) on the grounds that she is not suitable to be licensed.

II. BACKGROUND

A. Parties

2. Deol was licensed as a mortgage agent from July 1, 2008, to April 1, 2023 (licence #M08006362).
3. After the expiry of her licence, Deol applied on December 19, 2023, to reinstate her mortgage licence. Deol withdrew this application on January 15, 2024.
4. Deol subsequently re-applied for a mortgage agent license on March 6, 2024.
5. During the relevant time, Deol was licensed through the mortgage brokerage The Mortgage Alliance Company of Canada Inc., operating as Mortgage Alliance (“Mortgage Alliance”).
6. 1539339 Ontario Inc. (“1539339”) is a private corporation. Prior to February 16, 2022, Deol was the sole shareholder, director, and officer of 1539339. On February 16, 2022, Vikas Kumar purchased the shares of 1539339. However, Deol maintained signing authority over 1539339’s bank account.
7. 1539339 has never been licensed under the Act.

B. Dealings with “AJ” and “GS”

8. In or around April of 2022, a married couple (“AJ” and “GS”) were referred to Deol for assistance in obtaining a mortgage. AJ and GS needed this mortgage to finance their purchase of a newly built property in Brampton, Ontario.
9. In April 2022, AJ and GS met with Deol. During the meeting, they discussed their home purchase, what the purchase price was, what their down payment would be, and what the closing date was. AJ and GS provided Deol with the agreement of purchase and sale, a copy of their identification, and a partially completed Mortgage Alliance mortgage application.
10. Deol assured AJ and GS that she could arrange a mortgage for them and that they would be able to close on their property purchase.
11. Over the subsequent three to four weeks, AJ and GS sent Deol additional documents that Deol had told them she would need in order to arrange a mortgage on their behalf.
12. Deol told GS to open an account with a major bank (the “Bank”), but not to answer any phone calls from the Bank.
13. On May 10, 2022, “RG,” a mortgage advisor with the Bank, received client documents from an email address in the name of GS. However, GS states that this was not his email address, he did not send this email to the Bank, and he has no access to this email account.
14. On May 17, 2022, Deol arranged for a property appraisal to be performed in respect of the property purchased by AJ and GS.
15. On May 20, 2022, AJ sent Deol a text message expressing concern about the status of their mortgage as the closing was on June 2, 2022, and they had yet to be approved. Deol responded on the same day and stated, “Please note that I’m doing my best thar [sic] I can for your file. I’m not upset but there’s only so much I can say on the phone. I will give you update as soon I receive it[.] Your file is a tough file and lender keep asking for more and more documents[.] Just have patience and I will give you an update soon”.
16. On May 26, 2022, RG emailed a Mortgage Approval Letter from the Bank (the “Bank Letter”) to the purported GS email address. The Bank Letter referenced a mortgage loan amount of $1,000,000 for a five-year term with a variable 2.90% interest rate.
17. Deol subsequently telephoned AJ and told her that they had been approved for a mortgage from the Bank, but that they had to pay Deol $34,500 in cash. AJ asked for proof that the Bank mortgage had been approved, and Deol emailed AJ the Bank Letter.
18. On May 30, 2022, AJ and GS went to Deol’s office in Mississauga, Ontario, and gave $24,900.00 in cash to Deol.
19. AJ audio recorded some of the meeting with Deol and provided the recording to FSRA. In the recording, AJ asked Deol for a receipt for the cash payment, but Deol refused, stating “No, because you know it. These things are illegal, right. And illegal doesn’t have any slip.”
20. On May 31, 2022, GS again went to Deol’s office and gave an additional $7,000 in cash to Deol’s business partner (who GS understood to be Deol’s husband).
21. Deol subsequently called AJ or GS and stated that they needed to pay her the remaining $2,600. GS returned to Deol’s office and gave $2,600 in cash to Deol’s business partner.
22. On June 2, 2022, the day of closing, a series of events unfolded which resulted in AJ and GS being forced to accept private mortgage financing from 1539339:
    1. AJ spoke to Deol on the telephone. Deol told AJ not to worry, and that the mortgage would close that day. Concerned, AJ and GS went to Deol’s office where Deol and her partner were present.
    2. Deol referred AJ and GS to “MM,” a lawyer, who Deol said would be able to close the transaction. AJ and GS went to MM’s office. MM told them that he had received the mortgage instructions, but refused to show them the mortgage instructions.
    3. AJ and GS telephoned their lawyer, and she stated that she had not received any mortgage instructions.
    4. At approximately 3:00pm, MM told AJ and GS that as the Bank closed at 5:00pm they would not be able to close on the mortgage from the Bank. However, MM said that Deol had access to a private lender who could arrange financing.
    5. AJ and GS were presented with a $1,000,000 mortgage commitment from 1539339 which had a $45,000 lender fee with an interest rate of 7.99% for a term of 6 months. Under pressure and needing to close on their property, AJ and GS signed the mortgage commitment from 1539339.
    6. Deol purchased a $1,000,000 bank draft from 1539339’s bank account that was made payable to MM’s law firm.
23. On June 3, 2022, the closing was completed with a private mortgage issued by 1539339 using the funds from the bank draft purchased by Deol.
24. On or about June 5, 2022, RG received a telephone call from someone purporting to be GS who asked about a mortgage refinancing. RG subsequently received a copy of the 1539339 mortgage commitment from the email address in the name of GS.
25. On June 30, 2022, the Bank issued a mortgage for $1,000,000 for a 5-year term with a variable 3.26% interest rate. The proceeds of this mortgage were used to pay out the private mortgage with 1539339.
26. Mortgage Alliance has no records of either the mortgage issued by 1539339 or by the Bank.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Dealing in Mortgages not on Behalf of Brokerage

27. Subsection 2(3) of the Act states 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.”
28. The Director is satisfied that Deol contravened subsection 2(3) of the Act by dealing in mortgages for AJ and GS for remuneration while not acting on behalf of Mortgage Alliance.

B. Receiving Remuneration from Person Other Than Brokerage

29. Subsection 4(1) of Ontario Regulation 187/08 states that “A mortgage broker or agent shall not receive, directly or indirectly, any fee or other remuneration for dealing or trading in mortgages from a person or entity other than the brokerage on whose behalf he or she is authorized to deal or trade in mortgages.”
30. The Director is satisfied that Deol contravened subsection 4(1) of Ontario Regulation 187/08 by receiving a fee of $34,500 directly from AJ and GS, a person other than Mortgage Alliance.
31. Deol admits receiving these funds but claims she subsequently gave them to RG. RG denies receiving any funds from Deol.

IV. GROUNDS FOR REFUSAL TO ISSUE LICENCE

32. Subsection 14(1) of the Act states that the Chief Executive Officer shall issue a licence to an applicant who satisfies the prescribed requirements for the licence unless the Chief Executive Officer believes, on reasonable grounds, that the applicant is not suitable to be licensed having regard to such circumstances as may be prescribed and such other matters as the Chief Executive Officer considers appropriate.
33. Section 10 of Ontario Regulation 409/07 under the Act provides that, in determining whether an individual is not suitable to be licensed as a mortgage broker or agent, the Chief Executive Officer is required by subsections 14(1) and 16(4) of the Act to have regard to the following prescribed circumstances:
    1. Whether the individual’s past conduct affords reasonable grounds for belief that he or she will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
    2. Whether the individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
    3. Whether the individual has made a false statement or has provided false information to the Chief Executive Officer with respect to the application for the licence.
34. The Director is satisfied that Deol’s past conduct with respect to AJ and GS affords reasonable grounds for belief that she will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
35. In her dealings with AJ and GS, Deol breached subsection 2(3) of the Act, and subsection 4(1) of Ontario Regulation 187/08. Furthermore, as a result of her actions, AJ and GS suffered a pecuniary loss of $34,500 and were forced to accept a private mortgage from 1539339 at a much higher interest rate than Deol had led them to expect.
36. Given Deol’s actions with respect to AJ and GS, the Director reasonably believes that she is not suitable for licensing having regard to the circumstances prescribed in paragraphs 1 of section 10 of Ontario Regulation 409/07.
37. Accordingly, the Director proposes to refuse to issue a mortgage agent licence to Deol.
38. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, August 1, 2024.

Original signed by

Elissa Sinha
Director, Litigation & Enforcement

By delegated authority from the Chief Executive Officer

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