The Globe and Mail reports in its Wednesday, Feb. 27, edition that the Financial Services Commission of Ontario failed to make planned checks on mortgage brokers it had identified as risky because its resources were stretched.
A Reuters dispatch to The Globe reports that the FSCO planned to complete five on-site examinations of mortgage brokerages identified as risky this fiscal year, which ends March 31. However, as of Dec. 31, 2018, nine months into the year, it had not finished any of them.
Reuters questions whether mortgage brokers are being adequately supervised.
Mortgage-underwriting standards came under scrutiny after Home Capital Group accepted responsibility for misleading investors about problems with its procedures in 2017.
The FSCO plays a particularly important role because it supervises brokerages in Toronto, Canada's biggest housing market. It is due to be replaced by a new regulatory body, the Financial Services Regulatory Authority, in the spring of this year. It is unclear whether FSRA will have significantly more resources than its predecessor. Equifax says suspected fraudulent mortgage applications have increased by 52 per cent in Canada since 2013, with Ontario seeing the majority.
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