[ad_1]Neighbourhood in Brampton, OntarioWhen a bank declines your application, a mortgage broker offering a private refinance can seem like a way out. For one senior in Brampton, Ontario, that help reportedly came with around $47,000 in fees. The refinance also resulted in an approximately 40% increase in interest costs, and by October 2025, the client had no choice but to sell their home. This information comes from a case released by Ontario's financial regulator this month involving two mortgage brokers from Brampton and their companies. None of the claims have been proven yet, and the brokers are requesting a hearing. Nonetheless, this case highlights a tough truth for borrowers: just because someone has a broker's license doesn't mean they’re trustworthy; getting everything you need documented can make all the difference.Don't MissWhat does Ontario's regulator claim happened?On Oct. 2, 2026, the Financial Services Regulatory Authority of Ontario (FSRA) announced it was taking action against brokers Ruby Dhunna and Kanwaljit Dhunna along with their firms, DLC RK Mortgages and Platinum Mortgages. FSRA is responsible for licensing and monitoring mortgage professionals across the province. The situation revolves around two consumer complaints. In one instance, FSRA claims that Ruby Dhunna canceled a $135,000 mortgage without permission, which led to significant losses for a private lender. The second complaint involves an elderly client who took out a $425,000 refinance through Hosper Mortgage Investment Corporation. According to FSRA’s allegations, Kanwaljit Dhunna misrepresented the client's job status, income level, and assets to the lender. He is also accused of collecting about $50,900 in prepaid interest while keeping nearly $30,000 of those funds for himself. Fees totaled roughly $47,000 including a brokerage fee of $21,500. The regulators further allege that both brokers concealed over $4 million in pending civil judgments on their license renewal applications. They are proposing to revoke their licenses and impose a fine of $50,000 on Kanwaljit Dhunna; both brokerages are suspended until the hearing concludes.Why isn't having a license enough protection?The FSRA frequently encourages Ontarians to check its public registry before engaging with any broker. This step is crucial-if you deal with an unlicensed operator, you lose all legal protections that Ontario’s mortgage laws provide you with.<p Story ContinuesHowever, both brokers involved here were indeed licensed-this is why it's essential to investigate further. Both names can be searched in FSRA’s enforcement database to see if there are any proposals or orders against them. The regulators also allege that these brokers did not provide proof of errors and omissions (E&O) insurance which exists to protect clients if brokers make significant financial mistakes. Asking for this proof should be standard practice.Source linkRead More: How financially stable am I? You're doing better than most if you check off just one of these three boxesHow much can refinancing privately actually cost?Private lenders and mortgage investment corporations (MICs) fill gaps left by traditional banks. MICs gather funds from investors so they can lend money to individuals who can't get approval at major banks. In some situations, such as bridging loans or rebuilding credit, a short-term private loan may be justified.But expenses can quickly pile up. In this reported case,$47,000 in fees on a loan amounting to $425 ,000 equals roughly11%of what was borrowed, before considering any increased interest. Prepaid interest complicates matters even more. Because some lenders deduct several months' worth of interest upfront, you end up receiving significantly less cash than expected.Antoinette Leung, the head of financial institutions at FSRA noted in CMP publication that private mortgages often lack standardization and usually come with higher fees and restrictions. If you're retired on fixed income without clear plans for exit strategy, such additional costs will gradually erode your hard-earned equity.What must you learn from your broker before signing?FSRA regulations demand that brokers assess your individual financial circumstances prior recommending any mortgage. FSRA's consumer guide specifies how every fee should be disclosed along with its payment schedule. Brokers also need disclose potential conflicts or relationships interests ensuring you're aware risks tied every option they present.If you don’t receive those disclosures documented, take it as cause for concern.What should I do next?Before finalizing any private or broker-facilitated refinancing:Check both brokerage name respective agents within FSRA registry enforcement databases.Request detailed documentation regarding every fee including brokerage, lender, funding legal charges prepaid interest.An attorney familiar real estate review all paperwork prior signing.<<<<<
