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 Shawn Leonard Ruccia

NOTICE OF PROPOSAL TO REVOKE LICENCE AND TO IMPOSE AN ADMINISTRATIVE PENALTY

TO: Shawn Leonard Ruccia

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 and Enforcement (the “Director”), is proposing to revoke the mortgage agent level 2 licence issued to Shawn Leonard Ruccia (licence # M21003001).

AND TAKE NOTICE THAT pursuant to sections 38 and 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose an administrative penalty on Shawn Leonard Ruccia in the amount of $70,000 for contravening section 3 of Ontario Regulation 187/08 by causing Dominion Lending Centres National Ltd. to violate section 24(1) of Ontario Regulation 188/08.

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.

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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 15 (fifteen) 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 W, Suite 100
Toronto, ON 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 states 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

These are the reasons for the proposal by the Director to:
1. Revoke the mortgage agent level 2 licence issued to Shawn Leonard Ruccia (“Ruccia”); and
2. Impose an administrative penalty in the amount of $70,000 on Ruccia.

II. BACKGROUND

A. Parties

Ruccia is licensed as a mortgage agent level 2 (licence # M21003001). Ruccia has been licensed under the Act since July 29, 2021.
Ruccia was authorized by Dominion Lending Centres National Ltd. (“DLC”) (licence # 12360) from July 29, 2021 to January 30, 2024. Ruccia subsequently became authorized by Get A Better Mortgage Inc. (licence # 10874).
1985886 Ontario Ltd. o/a Eliminate Contract Consultants Ltd. (“ECC”) is an Ontario-registered corporation. ECC is not licensed under the Act.

B. Ruccia Arranged Mortgages That Were Referred From ECC

ECC approaches homeowners about removing or re-negotiating liens and notices of security interests (“NOSIs”) on properties (such as those placed by HVAC companies). ECC charges a fee for this service. In order to pay for its service and the cost of removing the lien, ECC recommends that homeowners obtain mortgages.
Between August 2022 and August 2023, ECC referred approximately eight groups of clients to Ruccia in order to arrange such mortgages.
Of these eight groups, Ruccia arranged seven completed mortgages for six groups of borrowers made up of a total of nine individuals (the “Borrowers”). The total mortgage amount was $2,027,750 and the individual mortgage amounts ranged from $100,000 to $430,750. The mortgages were secured by the Borrowers’ residential properties.
Six of the Borrowers were senior citizens and four of the Borrowers were retired.
The Borrowers’ mortgages arranged by Ruccia were unsuitable and had onerous terms:
1. The mortgages had high cost of borrowing. The disclosed Annual Percentage Rates (“APRs”) ranged from 30.46% to 38.82%.
2. The mortgages were interest-only;
3. The mortgages had terms of one year;
4. The entire principal amount of the mortgages was due after the expiry of the mortgage term; and
5. The Borrowers had annual incomes ranging from zero to $60,000.
All the mortgages were financed by Private Mortgage Inc. (“PMI”), except one by SCIV Inc. (“SCIV”). Both PMI and SCIV are private lenders.
Ruccia did not present lender options other than PMI and SCIV to the Borrowers. Although Ruccia stated that he reached out to multiple lenders, he claimed that the Borrowers did not satisfy the requirements of traditional mortgages due to pre-existing liens on their properties.
In at least one instance, no income documentation was collected by Ruccia prior to arranging a mortgage. One of the Borrowers stated that Ruccia failed to explain the terms of the mortgage.
Due to the unsuitable nature of the mortgages, at least one of the Borrowers was forced to sell his home in order to pay off the mortgage once it came due.
As payment for arranging these mortgages, Ruccia received fees of approximately $60,000.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Failure to Take Reasonable Steps to Ensure Suitability

Subsection 24(1) of Ontario Regulation 188/08 states that a brokerage shall take reasonable steps to ensure that any mortgage or investment in a mortgage that it presents for the consideration of a borrower is suitable for the borrower having regard to the needs and circumstances of the borrower.
Section 3 of Ontario Regulation 187/08 states that a mortgage broker or agent shall not do or omit to do anything that might reasonably be expected to result in the brokerage on whose behalf he or she is authorized to deal or trade in mortgages to contravene or fail to comply with a requirement established under the Act.
Ruccia, as a mortgage agent authorized by DLC, failed to take sufficient steps to ensure that the mortgages he arranged were suitable to the Borrowers’ needs and circumstances considering the short terms, high loan amounts, and the financial situation of the Borrowers.
The mortgages were unsuitable for the Borrowers:
1. All but three of the Borrowers were senior citizens;
2. The payments on mortgages exceeded or came close to exceeding the annual incomes of the Borrowers;
3. The APRs exceeded 30%;
4. The Borrowers’ residential properties were put forward as security for the mortgages thereby compounding the negative consequences of default. As noted above, at least one of the Borrowers was forced to sell his home to pay off the mortgage; and
5. Insufficient information was obtained and considered prior to presenting the mortgages.
Ruccia was aware of the circumstances relating to the Borrowers’ mortgages prior to arranging them. Ruccia prepared the mortgage applications and signed disclosure forms relating to all of the Borrowers’ mortgages. Despite his knowledge of the Borrowers’ precarious financial situations, Ruccia did not take steps to ensure the suitability of the mortgages such as conducting a full suitability analysis, finding other lender options, or presenting other options to the Borrowers.
The Director is therefore satisfied that Ruccia contravened section 3 of Ontario Regulation 187/08 by failing to take reasonable steps to ensure that the mortgage he presented to the Borrowers were suitable for them, causing DLC to contravene subsection 24(1) of Ontario Regulation 188/08.

IV. GROUNDS FOR REVOCATION OF RUCCIA’S MORTGAGE AGENT LICENCE

Subsection 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 the licence.
Under subsection 18(1) of the Act, such circumstances include:
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) of the Act, as the case may be, and such other matters as the Chief Executive Officer considers appropriate; and
3. if the licensee contravenes or fails to comply with a requirement established under this Act.
Section 10 of Ontario Regulation 409/07 under the Act states that in determining whether an individual is not suitable to be licensed as a mortgage agent, the Chief Executive Officer is required by sections 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.
As described above, the Director has determined that Ruccia has repeatedly contravened section 3 of Ontario Regulation 187/08. Pursuant to sections 18(1) and 19(1) of the Act, his licence can be revoked as a result of this contravention.
Furthermore, Ruccia’s failure to comply with the Act demonstrates that he is not suitable to be licensed as a mortgage agent under the Act. Ruccia’s past conduct affords reasonable grounds for belief that he will not deal or trade in mortgages in accordance with the law and with integrity and honesty. Ruccia failed to meet some of the most basic obligations of a mortgage agent by failing to take reasonable steps to ensure his brokerage complied with the Act and its regulation while arranging unsuitable mortgages for the Borrowers and exposing them to harm.

V. GROUNDS FOR IMPOSING AN ADMINISTRATIVE PENALTY

The Director is satisfied that imposing an administrative penalty on Ruccia under subsection 39(1) of the Act will satisfy one or both of the following purposes under subsection 38(1) of the Act:
1. To promote compliance with the requirements established under the Act.
2. To prevent a person from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under this Act.
An administrative penalty in the present circumstance will encourage agents to comply with their obligations under the Act and its regulations.
The imposition of an administrative penalty also prevents Ruccia from benefitting economically from his non-compliance with the Act and its regulations.
In determining the amount of the administrative penalties below, the Director has considered the following criteria as required by subsection 3(1) 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.
The Director is satisfied that an administrative penalty in the amount of $70,000 should be imposed on Ruccia for contravening section 3 of Ontario Regulation 187/08 by causing DLC to violate section 24(1) of Ontario Regulation 188/08.
In respect of the first criterion, the Director is satisfied that Ruccia’s repeated misconduct was intentional. As a licensee, although Ruccia was at least aware of the financial circumstances of the Borrowers, he arranged mortgages without taking reasonable steps to ensure that the mortgages were suitable. He knew the Borrowers’ properties had existing liens but still arranged mortgages with exceptionally high APRs, short terms, high interest rates and no documented exit strategy for the Borrowers.
In respect of the second criterion, the Director is satisfied that Ruccia’s misconduct has caused significant harm.
More than half of the Borrowers were senior citizens. One had no income. The mortgaged properties were their residences. The exceptionally high APRs and interest rates and the severe consequences of default made the mortgage terms especially unsuitable and the misconduct related to the mortgages particularly egregious.
Furthermore, Ruccia’s misconduct, as a licensee under the Act, had the potential to undermine public confidence in the regulatory regime established by the Act and its regulations.
In respect of the third criterion, the Director is unaware of any steps taken by Ruccia to remedy the contraventions described in this proposal.
In respect of the fourth criterion, the Director is satisfied that Ruccia derived substantial direct economic benefit from the contraventions described in this proposal. Ruccia received fees of approximately $60,000 as a result of his breaches of the Act.
In respect of the fifth criterion, the Director is unaware of any further contraventions or failures to comply in the preceding five years by Ruccia other than those discussed in this Notice of Proposal.
The Director is satisfied, having regard to all the circumstances, that the amount of the penalties is not punitive in nature, and that the amounts are consistent with one or both purposes of section 38 of the Act.
Such further and other reasons as may come to the attention of the Director.

DATED at Toronto, Ontario, July 17, 2025

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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