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UPDATE 1-Ontario regulator penalizes two former Home Capital brokers
May 26, 2017 / 7:35 PM / 5 months ago

UPDATE 1-Ontario regulator penalizes two former Home Capital brokers

(Adds background on Home Capital)

TORONTO, May 26 (Reuters) - The Financial Services Commission of Ontario last year penalized two former Home Capital Group Inc mortgage brokers for breaking rules on mortgage lending.

The regulator confirmed in an email on Friday that it had taken enforcement actions against Gagandeep Duggal and Zaheer Mohammad. Home Capital declined comment.

The FSCO said it found that Duggal and Mohammad had broken rules relating to the Mortgage Brokerages, Lenders and Administrators Act, which prohibits mortgage brokers from providing false information in mortgage applications.

Mohammad was fined C$44,000 in May 2016 for giving false income and employment information on six separate occasions and had his mortgage agent license revoked, according to the regulator’s website. Duggal received a C$5,000 fine in November, the website said.

Duggal did not immediately respond to Reuters request for comment, while Mohammad could not be reached.

Home Capital, Canada’s largest non-bank lender, is struggling with financing problems. Depositors have withdrawn more than 90 percent of funds from Home Capital’s high interest savings accounts since March 27, when the company terminated the employment of then-Chief Executive Martin Reid.

The withdrawals accelerated after April 19, when Canada’s biggest securities regulator, the Ontario Securities Commission, accused Home Capital of making misleading statements to investors about its mortgage underwriting business. The company has said the accusations are without merit. (Reporting by Matt Scuffham; Editing by Andrew Hay and Steve Orlofsky)

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