IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 15, 16, 21, 38 and 39;

AND IN THE MATTER OF John Chehade

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I – INTRODUCTION

1. John (Johnny) Chehade (“Chehade”) is licensed as a mortgage agent level 2 under the Act (licence #M21002519). His license expired March 31, 2025. Chehade has applied to renew his license.
2. During the relevant time, Chehade was authorized to deal or trade in mortgages as a mortgage agent on behalf of Forest City Funding Inc., operating as Dominion Lending Centres FC Funding (“FCF”).
3. On December 4, 2025, 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 Chehade (the “NOP”).
4. Chehade disputed the allegations and, on or about December 17, 2025, requested a hearing before the Financial Services Tribunal (the “Tribunal”) in respect of the NOP.
5. Chehade 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

6. Rhett McClenaghan (“McClenaghan”) has been licensed as a mortgage broker since June 9, 2008 (license #M08003293). During the relevant time, McClenaghan was Chehade’s supervisor at FCF.
7. McClenaghan and his wife are the sole directors of 2078637 Ontario Inc., operating as Forest City Living (“FCL”).
8. FCL has never been licensed under the Act.

A. Dealings with the Borrowers

(i) The First Mortgage

9. “AT” and “MA” are a married couple. “RT” is AT’s grandmother (collectively, AT, MA and RT are referred to as the “Borrowers”).
10. The Borrowers owned a property in London, Ontario (the “Property”). In March 2022, the Borrowers had a mortgage on the Property with a major bank (the “Bank”) that charged interest of 2.5% per year. The Borrowers made monthly payments of approximately $2,700 on this mortgage.
11. The Borrowers wanted a $60,000 loan via their line of credit with the Bank. However, the Bank refused to extend this loan.
12. Chehade met with the Borrowers and suggested that they break their mortgage with the Bank, pay the approximately $11,000 penalty for doing so, and refinance with a “B” lender (the “B Lender”) while consolidating all liabilities.
13. However, the B Lender required that the Borrowers repay approximately $40,000 in unsecured debt prior to advancing funds. Chehade informed the Borrowers that a $40,000 dollar gift was required to complete the transaction.
14. The B Lender did not allow second mortgages without its approval and required that if the $40,000 came from a gift, it be non-repayable. The Borrowers advised Chehade that the $40,000 would come from proceeds of a tractor sale and a potential gift from AT’s father. In supporting the process based on the information provided, Chehade worked with the Borrowers and AT’s father in preparing a gift letter indicating that the $40,000 was a non-repayable gift from AT’s father (the “Gift Letter”).
15. Chehade submitted this Gift Letter to the B Lender, knowing that the $40,000 was in reality a loan but believing that the loan would be repaid from the eventual sale of the Borrowers’ home.
16. FCL then provided $40,000 to AT’s father, who provided the funds to AT. The $40,000 loan from FCL was secured by a promissory note dated April 19, 2022, that charged 14% interest.
17. The $1,000,000 one-year mortgage on the Property from the B Lender was registered on May 2, 2022 (the “First Mortgage”). The interest rate for the First Mortgage was 3.04% per year.
18. FCF received a brokerage fee of $4,250 for arranging the First Mortgage, of which Chehade received $2,721.37 and McClenaghan received $425. Chehade also received a “finder’s fee” of $5,000 and a “volume bonus” of $1,500.
19. Chehade did not conduct a proper suitability analysis in advance of arranging the First Mortgage. Instead, he had AT sign a one-page inadequate “Suitability Form” which was provided by his brokerage.

(ii) The FCL Second Mortgage

20. FCL subsequently extended an additional $40,000 loan to the Borrowers to allow them to make a deposit on a new build property. This loan, the initial $40,000 loan, and an additional loan were secured via a one-year interest-only $165,000 second mortgage on the Property from FCL that was registered on September 9, 2022 (the “FCL Second Mortgage”).
21. The FCL Second Mortgage charged an interest rate of 14% (a total of $23,100 for one year). FCL also received a “lender fee” of $5,500.
22. Chehade arranged the FCL Second Mortgage outside of his brokerage. FCF has no records of the FCL Second Mortgage. Chehade did not receive any compensation in connection with the FCL Second Mortgage.

(iii) The Renewal of the First Mortgage

23. After one year, the First Mortgage came due. The Borrowers’ new-build property was not completed. The B Lender agreed to renew its mortgage but increased the interest rate to 7.19% due to the Bank of Canada increasing its rates and current market conditions. Chehade arranged this renewal.
24. FCF received a brokerage fee of $1,962.25 for renewing the First Mortgage, of which Chehade received $1,409.88 and McClenaghan received $196.22.

(iv) The New Second Mortgage

25. Around the same time, the FCL Second Mortgage came due. To repay it, Chehade arranged a new one-year second mortgage on the Property of $280,000 from a different B lender that charged interest of 12.75% per year (the “New Second Mortgage”). The New Second Mortgage was registered on August 4, 2023, and was to be used to finance the Borrowers’ new-build construction.
26. FCF received a brokerage fee of $5,600 for arranging the New Second Mortgage, of which Chehade received $4,023.60 and McClenaghan received $560.00.
27. Chehade did not conduct any form of suitability analysis for the Borrowers in respect of the New Second Mortgage. Instead, he relied on a third-party suitability analysis which was accepted by FCF at the time of the New Second Mortgage.
28. As a result of the increase in the interest rate from the B Lender and the payments for the New Second Mortgage, the Borrowers’ monthly payments increased.
29. The Borrowers were unable to make this new monthly payment. The Borrowers listed their Property for sale. However, due to declining market conditions, the listing price was not supported by market value. As a result, the anticipated sale proceeds were insufficient to complete the purchase of the new construction property, and the Borrowers were unable to proceed with the transaction.

B. Chehade’s License Renewal

30. After receiving a complaint from the Borrowers in January of 2024, FSRA contacted FCF’s Principal Broker with a series of questions. FCF’s Principal Broker then contacted Chehade, informed them of FSRA’s investigation, and asked him to answer the questions.
31. Chehade provided a response to FCF’s Principal Broker in February of 2024.

32. Chehade applied to renew his license on March 24, 2025. In this application, Chehade submitted a response of “No” to the question:

    “… are you the holder of such a license and currently the subject of an investigation or upcoming disciplinary proceeding that may result in a penalty being imposed?”

PART III – NON-COMPLIANCE WITH THE ACT

33. By engaging in the conduct described above in Part II, Chehade admits and acknowledges that he breached the Act as follows:
    1. Providing documentation that did not meet the requirements of subsection 43(2) of the Act;
    2. Acting in circumstances where he ought to know that by acting, he was being used by a borrower to facilitate conduct that was not compliant with regulatory standards contrary to section 3.1 of Ontario Regulation 187/08;
    3. Falling short of taking reasonable steps to ensure that mortgages he presented to the Borrowers were suitable for them, causing FCF to contravene subsection 24(1) of Ontario Regulation 188/08, contrary to section 3 of Ontario Regulation 187/08;
    4. Submitting inaccurate responses on his license renewal application dated March 24, 2025, contrary to section 45(1) of the Act.

PART IV – TERMS OF SETTLEMENT

34. Chehade admits the facts contained in Part II of these Minutes of Settlement and Undertaking (“Minutes”).
35. Chehade acknowledges and agrees that they have been given the opportunity to seek independent legal advice and have done so (or have waived the right to do so) and are entering into these Minutes voluntarily, understanding the consequences of doing so.
36. Chehade 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 Order

37. Chehade acknowledges that, upon execution of these Minutes by both Parties, the order attached as Schedule “A” to these Minutes (the “Order”) will be issued, pursuant to which:
    1. Chehade shall pay an administrative penalty of $12,500; and
    2. Conditions shall be imposed on the Level 1 mortgage agent licence issued to Chehade.

(b) Process for Execution of Settlement

38. Chehade acknowledges that these Minutes are not binding on the Director until signed by the Director.
39. 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.
40. Upon receiving an executed copy of these Minutes from FSRA, Chehade will withdraw their 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 business days.
41. 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 an Order in the form attached as Schedule “A” to these Minutes.
42. 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 Order

43. The Parties will keep the terms of these Minutes and the Order confidential until the Order is issued, except that:
    1. The Director shall be permitted to disclose the Minutes and the Order within FSRA;
    2. Chehade shall be permitted to disclosure the Minutes and the Order to his legal representative, financial professionals and/or spouse; and
    3. The Parties shall be permitted to inform the Financial Services Tribunal.
44. If either of the Parties do not sign these Minutes or the Director does not issue the Order:
    1. These Minutes, the Order, and all related discussions and negotiations will be without prejudice to FSRA and Chehade; and
    2. FSRA and Chehade 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 Order, or any related discussions or negotiations.
45. Upon issuance of the Order:
    1. Chehade acknowledges that these Minutes and the Order 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 Order; and
    2. 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 Order.

(d) Further Proceedings

46. Whether or not the Order is issued, Chehade 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.
47. Upon issuance of the Order:
    1. Chehade waives all rights to a hearing before the Tribunal regarding the NOP;
    2. Chehade waives all rights to a judicial review or appeal of the Order;
    3. Chehade acknowledges that, subject to subparagraph (iv), FSRA may consider the conduct and admissions described in these Minutes in any future licensing decision, administrative penalty, or prosecution as an aggravating factor;
    4. The Director agrees that FSRA will not initiate further proceedings against Chehade based solely on the conduct and admissions described in these Minutes, unless:
       1. New facts come to FSRA’s attention that are materially different from described in these Minutes; or
       2. Chehade fails to comply with these Minutes or the Order;
    5. Chehade agrees that should they fail to comply with any term in these Minutes or the Order, FSRA is entitled to bring any proceedings available to it.

DATED at London, Ontario, February 23, 2026

Original signed by

John (Johnny) Chehade

DATED at London, Ontario, February 23, 2026

Original signed by

Rhett McClenaghan
Name of Witness

DATED at Toronto, Ontario February 24, 2026.

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 15, 16, 21, 38 and 39;

AND IN THE MATTER OF John Chehade

ORDER TO IMPOSE ADMINISTRATIVE PENALTIES
AND TO IMPOSE CONDITIONS ON LICENCE

John (Johnny) Chehade (“Chehade”) is licensed as a mortgage agent level 2 under the Act (licence #M21002519). His license expired March 31, 2025. Chehade has applied to renew his license.

On December 4, 2025, the Director, Litigation & 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 to refuse to renew the mortgage agent level 2 licence issued to Chehade and to impose Administrative Penalties in respect of Chehade (the “NOP”).

A Request for Hearing (Form 1), dated December 17, 2025, was delivered to the Financial Services Tribunal (the “Tribunal”) in accordance with sections 21(3) and 39(5) of the Act respecting the NOP.

On [date], Chehade withdrew the Request for Hearing, and, on [date], the Tribunal closed its file in respect of this matter. Therefore, pursuant to sections 21(7) and 39(7) of the Act, the Director makes the following Orders.

ORDER

Administrative penalties in the total amount of $12,500 are hereby imposed on John (Johnny) Chehade, for the reason set out in the Minutes of Settlement.

TAKE NOTICE THAT the Financial Services Regulatory Authority of Ontario will deliver an invoice to John (Johnny) Chehade with information as to where and how to pay the administrative penalties.  John (Johnny) Chehade must pay the administrative penalties no later than thirty (30) days after the Order is issued unless otherwise agreed with the Financial Services Regulatory Authority of Ontario.

If John (Johnny) Chehade fails to pay the administrative penalty in accordance with the terms of this Order, 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 the 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

ORDER

For the reasons set out in the Minutes of Settlement, the following conditions are imposed on the mortgage agent licence issued to John (Johnny) Chehade (“Chehade”) for a period of two years:

1. Chehade shall be restricted to a mortgage agent level 1 license; and
2. Chehade’s work as a mortgage agent shall be closely supervised by his Principal Broker.

DATED at Toronto, Ontario,

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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