To avoid mortgage fraud in Canada, verify every mortgage professional you speak with against their provincial regulator’s public license registry — in Ontario, that’s FSRA’s online database. Deal only with licensed brokers, brokerages, and agents, and confirm their license number appears on every document they send you. Refuse to sign blank forms, refuse to send money before a lawyer reviews the paperwork, and refuse to work with anyone pressuring you to skip your own independent legal advice. Report suspected fraud to your provincial regulator, the Canadian Anti-Fraud Centre, and your local police — in that order.
The Warning Bulletins Have a Pattern
Recent months have seen the Financial Services Regulatory Authority of Ontario (FSRA) publish several public warnings against individuals arranging mortgages without a license. Read side by side, the bulletins share more than a headline. They describe the same handful of moves.
Pressure to sign quickly. Financing arranged through numbered companies rather than named lenders. Consumers reportedly being asked to sign releases that promise not to speak with regulators. The names change; the pattern doesn’t.
That pattern is the useful part. If you know what an unlicensed operator typically does, you can recognize the shape of the problem before the paperwork arrives — long before you send anyone money. The rest of this article is that pattern, translated into checks you can run yourself, plus FSRA’s own market warning about protecting your finances if you want the regulator’s version.
Quick Start: Pick Your Path
Stop. Run a two-minute license lookup. Confirm person, brokerage, and license number match your documents. If any of the three is missing, the conversation is over.
Add an enforcement-history check. A prior sanction is not automatic disqualification — but it is a question to ask directly. See why working with a licensed broker matters.
Skip to the reporting section below. Order matters, and moving quickly can protect your credit file and your funds from further damage.
Verify Your Broker: The Two-Minute Check
Every mortgage professional in Ontario must be licensed by FSRA — brokerages, brokers, and agents alike. FSRA maintains a public registry that anyone can search, free of charge, in under two minutes.
Here’s what a legitimate result looks like. You search by name, brokerage, or license number. The page returns a matching record with the individual’s category (agent, broker, or brokerage), their license status, their sponsoring brokerage, and any published enforcement history. If any of that is missing or the search returns nothing, you’re not looking at a licensed professional.
Try it yourself with a live example: Razi Khan’s broker profile at Pegasus Mortgage Lending Center Inc. — FSRA license #M08005230 — appears in the registry with an active status and a sponsoring brokerage. That’s what a valid record looks like.
Outside Ontario, the equivalent regulators publish similar registries. In British Columbia, that’s the BC Financial Services Authority (BCFSA). In Alberta, it’s the Real Estate Council of Alberta (RECA). In Quebec, mortgage brokers are overseen by the Autorité des marchés financiers (AMF). New Brunswick uses the Financial and Consumer Services Commission (FCNB). The lookup is different in each province, but the underlying idea is the same: if the professional is licensed, they appear in a public database. If they don’t appear, they aren’t licensed.
Red Flags: What Fraud Actually Looks Like
| Stage | Legitimate file | Fraudulent file |
|---|---|---|
| Initial contact | Referral or inbound to a real brokerage website | Cold call, WhatsApp DM, or unsolicited social message |
| Documentation | Secure client portal with an audit trail | Loose email attachments to a personal address |
| Communication | Business email on the brokerage domain | Personal Gmail, iCloud, or free-email addresses |
| Fees | Invoiced by the brokerage with a receipt | Upfront cash or e-transfer request before any work |
| Legal advice | Independent lawyer encouraged; timeline supports it | Discouraged, deflected, or pressured against |
| Closing paperwork | Walked through by your own lawyer, page by page | “Just sign here, we’re on the clock” |
Read across the table and the shape of a legitimate file is consistent. Contact typically starts with a referral or an inbound inquiry to a brokerage’s real website, not with a cold WhatsApp message. Documents move through a secure client portal, not as loose email attachments to a personal address. Fees appear on a brokerage invoice, not as an upfront cash or e-transfer request. Independent legal advice is encouraged. Closing paperwork is walked through by your own lawyer, not slid across a table with instructions to sign quickly.
Fraud tends to invert all six. That is what gives it away — not any single tell, but the pattern of several appearing together in the same file.
Three specific patterns show up repeatedly in the FSRA warning bulletins published across 2026. The financing is arranged through numbered companies rather than named lenders — corporations identified only by digits and a jurisdiction. Consumers are pressured to sign documents on very short timelines, sometimes minutes. And there are reports of people being asked to sign releases promising not to speak with regulators, something that never appears in a legitimate transaction.
If your file has one of those features, ask questions. If it has two, involve your own lawyer before signing another page. If it has all three, you’re looking at the pattern the regulator is warning about.
The Six-Step Fraud-Proofing Roadmap
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1
Verify the license. Search the professional’s name and license number on the FSRA public registry — or the BCFSA, RECA, AMF, or FCNB registry outside Ontario. Confirm the status is active. Screenshot the record and keep it with your file.
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2
Check for enforcement history. FSRA publishes past sanctions, license conditions, and Administrative Monetary Penalties on the same registry. A prior enforcement action is not a disqualifier, but it is a conversation to have directly with the professional before proceeding.
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3
Confirm the brokerage matches the documents. The name on the mortgage commitment, the invoice, and the license record should all be the same brokerage. Mismatched names — a “sponsoring brokerage” on the license that doesn’t appear on the paperwork — is one of the specific patterns the regulator is watching for.
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4
Get independent legal advice. Your own lawyer, not one recommended by the broker. Independent legal advice on a mortgage typically costs a few hundred dollars. It is the single most valuable line item on your closing statement. See what a legitimate pre-approval process looks like end to end.
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5
Never transfer funds without your lawyer’s written approval. Wire fraud around real estate closings has been rising for years. A written go-ahead from your own lawyer, confirming the correct trust account, is your protection.
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6
Request title insurance. FSRA describes title insurance as a one-time premium — often just a few hundred dollars — that protects your title from fraud for as long as you own the property. It is inexpensive. Buy it.
Private Lenders: Legitimate Option or Red Flag?
Private lending is not fraud. It is a legal, regulated corner of the Canadian mortgage market — and a large one. According to FSRA’s most recent annual report on private lending, private mortgage lenders accounted for about 15.8 percent of Ontario’s market in 2024, funding more than 65,000 loans worth roughly $32 billion.
Private lenders serve borrowers whose files don’t fit inside the tight boxes big banks use — the self-employed, new arrivals to Canada, homeowners consolidating debt, or anyone with a short-term financing need. Complex files like these are the day job for Razi Khan, Founder and Mortgage Broker at Pegasus. Used correctly, a private mortgage is a bridge to a better product. See how private lending actually works in Canada for the full picture.
The problem in the recent FSRA warnings is not private lending itself. It is the combination of a private mortgage plus an unlicensed intermediary plus pressure to sign fast. That combination is what the bulletins keep describing. A private mortgage arranged through a licensed broker with independent legal advice is a legitimate financing tool. A private mortgage arranged by someone whose license you cannot find is something else entirely.
Common Mistakes That Expose Canadians to Fraud
Six mistakes come up repeatedly in files that go sideways. Each has a straightforward fix.
- Signing without a lawyer to save time. Independent legal advice adds days and a few hundred dollars — and prevents most of the disasters this article describes.
- Trusting a WhatsApp-only broker with no visible brokerage. Real brokerages have websites, offices, and business email addresses. Ask where their license is displayed.
- Sending a deposit before your lawyer confirms the trust account. Wire instructions can be changed by fraudsters after a file is already open. Confirm every dollar in writing.
- Letting someone else fill in your application. You are legally responsible for the content of the form you sign, even if a broker typed the answers. Read every line.
- Accepting “we can adjust the income figure” as friendly advice. Misrepresenting income on a mortgage application is fraud under the Criminal Code of Canada, regardless of who suggested it.
- Skipping title insurance to save a few hundred dollars. It is one of the least expensive and most protective purchases in the entire closing package.
For more common questions covered in one place, see our answers to more common mortgage questions.
Reporting Fraud: Who to Call and In What Order
Order matters. The police file is the anchor document everyone else refers back to, so start there. In Ontario, the regulator complaint goes to FSRA; in British Columbia, to BCFSA; in Alberta, to RECA. The Canadian Anti-Fraud Centre — reachable at 1-888-495-8501 — collects the national data that lets law enforcement see patterns across cases.
Your own lawyer comes fourth, once the other three files are open. They can advise on civil recovery and, if appropriate, help place a fraud alert on your credit file with Equifax and TransUnion to protect against follow-on identity misuse.
1 | Local police Opens the criminal file that becomes the anchor document every other agency references. Use 911 if in progress; the non-emergency line otherwise. |
2 | Provincial regulator FSRA in Ontario · BCFSA in British Columbia · RECA in Alberta · AMF in Quebec · FCNB in New Brunswick. Files the licensing complaint. |
3 | Canadian Anti-Fraud Centre Call 1-888-495-8501. Feeds the national data pool that lets law enforcement see patterns across cases. |
4 | Your own lawyer For civil recovery advice and next-step strategy once the criminal and regulatory files are open. |
OPT | Credit-bureau fraud alert (optional) Place a fraud alert with Equifax and TransUnion if identity data may have been compromised in the transaction. |
Frequently Asked Questions
Common questions we hear from clients on this topic. For definitions of any terms used, see our glossary of mortgage terms.
How do I check if my mortgage broker is actually licensed in Ontario?
Is it illegal for my broker to tell me I can just round up my income on the application?
What happens if I signed with someone who turned out to be unlicensed — is my mortgage still valid?
Are private lenders in Canada always risky, or are some of them legitimate?
Do I really need my own lawyer for a mortgage, or can I just use the one my broker suggests?
What is title insurance and does it actually protect me from mortgage fraud?
I got a cold call offering me a great refinancing rate — how do I tell if it’s a scam?
Who should I call first if I think I’ve been defrauded — the police or FSRA?
Start With a Licensed Broker Who Welcomes Every Check
A two-minute registry lookup, an independent lawyer, and a licensed broker who invites your due diligence — that is the protection system, and it works. Begin your file with a name and a license number attached from day one.
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & References
- FSRA — Detecting and Preventing Mortgage Fraud (industry guidance)
- FSRA — Watch Out for Mortgage Fraud (consumer page)
- FSRA — Public warning bulletins (2026)
- Criminal Code of Canada — section 380 (fraud)
- Canadian Anti-Fraud Centre — 1-888-495-8501
- Provincial regulators — BCFSA, RECA, AMF, FCNB
- Mortgage Brokerages, Lenders and Administrators Act, 2006 (Ontario)