IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 19, 21, 38 and 39;

AND IN THE MATTER OF Viviana Prentice.

NOTICE OF PROPOSAL TO REVOKE LICENCE and
NOTICE OF PROPOSAL TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Viviana Prentice

TAKE NOTICE THAT pursuant to sections 19 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 revoke the mortgage agent licence issued to Viviana Prentice.

AND 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 ten administrative penalties of $5,000 each on Viviana Prentice for receiving remuneration from a person other than her brokerage, contrary to subsection 4(1) of Ontario Regulation 187/08.

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 the reasons for the proposal by the Director to:
   1. Revoke the mortgage agent licence issued to Viviana Prentice (“Prentice”); and
   2. Impose ten administrative penalties totaling $50,000 on Prentice.

II. BACKGROUND

A. Parties

2. Prentice is licensed as a mortgage agent level 2 (License #M08010314). Her license is scheduled to expire on March 31, 2025.
3. From July 21, 2009, until she was terminated on January 16, 2023, Prentice was licensed through Dominion Lending Centers Mortgage Connection Inc. (“Mortgage Connection”) (license #10390). Since April 20, 2023, Prentice has been licensed through 2725051 Ontario Inc. operating as Canadian Tailored Mortgage Solutions (license #13228).

B. Receiving Remuneration from Person Other Than Brokerage

4. Prentice was interviewed by FSRA investigators on August 23, 2024 (the “Interview”). In the Interview, Prentice admitted that:
   1. While working at Mortgage Connection, Prentice hired a contract employee to help her with the paperwork of her mortgage business;
   2. In order to pay the salary of this employee, Prentice began charging certain clients a fee in addition to the fee charged by Mortgage Connection (the “Additional Fees”);
   3. These Additional Fees were agreed to with clients via a Direction of Funds Agreement and were paid either directly to Prentice or via the clients’ lawyer to Prentice;
   4. Prentice charged Additional Fees to clients on ten transactions in the total amount of $34,050;
   5. Prentice did not forward any portion of the Additional Fees to Mortgage Connection;
   6. After her actions with respect to the Additional Fees were discovered by Mortgage Connection, Mortgage Connection terminated Prentice on January 16, 2023, for charging fees outside of the brokerage and reported the issue to FSRA;
   7. On January 16, 2023, Prentice signed a promissory note in favor of Mortgage Connection for $20,000 “for partial restitution of brokerage fee split illegally collected” (the “Promissory Note”); and
   8. Prentice has not made any payments in respect of the Promissory Note.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Receiving Remuneration from Person Other Than Brokerage

5. 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.”
6. The Director is satisfied that Prentice contravened subsection 4(1) of Ontario Regulation 187/08 on ten occasions by receiving the Additional Fees of $34,050 from ten clients, persons other than Mortgage Connection.

IV. GROUNDS FOR REVOKING LICENCE

7. Section 19(1) of the Act states that the Chief Executive Officer may, by order, revoke a licence in any of the circumstances in which he or she is authorized to suspend a licence.
8. According to section 18(1) of the Act, such circumstances are:
   1. if the licensee ceases to satisfy the prescribed requirements for issuance or renewal, as the case may be, of the licence;
   2. if the Chief Executive Officer believes, on reasonable grounds, that the licensee is no longer suitable to be licensed having regard to the circumstances, if any, prescribed for the purposes of subsection 14(1) or 16(4), as the case may be, and such other matters as the Chief Executive Officer considers appropriate;
   3. if the licensee contravenes or fails to comply with a requirement established under this Act; or
   4. if such other circumstances as may be prescribed.
9. Section 10 of Ontario Regulation 409/07 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.
10. Given Prentice’s actions with respect to the Additional Fees, the Director has reasonable grounds to believe that Prentice is no longer suitable to be licensed as a mortgage agent under the Act because she has contravened or failed to comply with a requirement under the Act as contemplated in section 18(1)(c) under the Act.
11. Furthermore, Prentice’s actions provide reasonable grounds for belief that she is no longer suitable to be licensed as a mortgage agent under the Act, and that her mortgage agent licence should be revoked, because her past conduct affords reasonable grounds for belief that she will not deal or trade in mortgages in accordance with the law and with integrity and honesty as contemplated in 18(1)(b) under the Act.
12. The Director is satisfied that Prentice will not deal or trade in mortgages in accordance with the law and with integrity and honesty as she has contravened the Act, as outlined above.
13. Accordingly, the Director proposes to revoke the mortgage agent licence issued to Prentice.

V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

14. The Director is satisfied that imposing administrative penalties on Prentice 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.
15. The Director is satisfied that ten administrative penalties of $5,000 each should be imposed on Prentice for receiving remuneration from a person other than her brokerage, contrary to subsection 4(1) of Ontario Regulation 187/08.
16. 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.
17. In respect of the first criterion, the Director is satisfied that Prentice’s actions were intentional. Prentice carried out her actions with ten different clients in order to generate additional funds.
18. In respect of the second criterion, the Director is satisfied that Prentice’s activities had the potential to cause significant harm. Requiring that all fees flow through a brokerage is key to ensuring that all fees charged are compliant with the Act and regulations. Prentice’s breach of this requirement resulted in ten clients paying inflated fees totaling $34,050, which increased their cost of borrowing and their risk of default.
19. In respect of the third criterion, the Director is unaware of any efforts by Prentice to mitigate any loss or take other remedial action. The Director notes that Prentice has failed to make any payments in respect of the Promissory Note.
20. In respect of the fourth criterion, as a result of Prentice’s failure to comply with the Act she received fees of $34,050.
21. In respect of the fifth criterion, the Director is unaware of any further contraventions or failures to comply in the preceding five years by Prentice.
22. The Director is satisfied, having regarded all the circumstances, that the proposed amount of the administrative penalties are not punitive in nature, and the amount is consistent with one or both purposes of section 38 of the Act.
23. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, October 25, 2024.

Original signed by

Elissa Sinha
Director, Litigation & Enforcement

By delegated authority from the Chief Executive Officer

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