Oct 18, 2026
When the bank turns you down, a mortgage broker dangling a private refinance can feel like a lifesaver. For one senior living in Brampton, Ontario that lifeline allegedly came with about $47,000 in fees. The refinance also brought a roughly 40% jump in interest costs, and by October 2025, the client had been forced to sell the home.
Those details come straight from a case Ontario’s financial regulator published this month involving two Brampton mortgage brokers and their firms. None of the allegations have been proven, and the brokers have asked for a hearing.
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Still, the case brings a tough reality to light for borrowers: a broker’s license is just a starting point, not a stamp of guaranteed honesty, and getting everything you’re owed in writing can make or break your outcome.
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What does Ontario’s regulator allege happened?
On Oct. 2, 2026, the Financial Services Regulatory Authority of Ontario (FSRA) announced enforcement action against brokers Ruby Dhunna and Kanwaljit Dhunna and their brokerages, DLC RK Mortgages and Platinum Mortgages. FSRA is the provincial regulator responsible for licensing and overseeing mortgage professionals.
The case comes down to two consumer complaints. In the first instance, FSRA alleges that Ruby Dhunna wiped out a $135,000 mortgage without authorization, causing a private lender to lose everything.
In the second case, an elderly client took out a $425,000 refinance through Hosper Mortgage Investment Corporation. According to FSRA’s allegations, Kanwaljit Dhunna misrepresented the client’s employment, income and assets to the lender. He is also accused of collecting about $50,900 in prepaid interest and keeping nearly $30,000 of the funds. Fees reached about $47,000, including a $21,500 brokerage fee.
Regulators further allege that both brokers hid more than $4 million in outstanding civil judgments on their licence renewal applications. It’s proposing to revoke their licences and fine Kanwaljit Dhunna $50,000, and both brokerages are suspended until the hearing ends.
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Why isn’t a licence enough to protect you?
FSRA regularly urges Ontarians to check its public registry before working with a broker. That’s an important detail — if you work with an unlicensed operator, you lose all the legal protections Ontario’s mortgage laws provide.
But both brokers in this situation were actually licensed — which is exactly why you need to dig a little deeper. FSRA’s enforcement database lists proposals and orders against licensees, so you can search the broker’s name and the brokerage’s name.
Regulators further allege the brokers failed to provide proof of errors and omissions (E&O) insurance, which exists to compensate clients if a broker makes a major financial error. Asking for proof of it is fair game.
How much can a private refinance really cost?
Private lenders and mortgage investment corporations (MIC) step in where traditional banks leave off. MICs pool together money from investors to give mortgages to people who can’t get approved at a major bank. In some cases, such as bridging to a sale or rebuilding credit, a short-term private loan can make sense.
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But the costs stack up quickly. In the alleged case, $47,000 in fees on a $425,000 loan works out to roughly 11% of the amount borrowed, before any higher interest. Prepaid interest makes things even trickier. Because some lenders deduct several months of interest upfront, you end up walking away with significantly less cash than the loan amount.
Antoinette Leung, FSRA’s head of financial institutions and mortgage broker conduct, has noted in the publication CMP that private mortgages tend to be less standardized and carry more fees and restrictions. If you’re a retiree on a fixed income without a clear exit strategy, these added costs will steadily drain the equity you’re trying to safeguard.
What must a broker tell you before you sign?
FSRA regulations require brokers to evaluate your specific financial situation before recommending a mortgage. FSRA’s consumer guide also requires brokers to disclose every fee and when it’s paid. They also have to lay out any relationships or conflicts of interest, and make sure you understand the risks behind every option they put on the table.
If you don’t receive those disclosures in writing, treat that as a reason to pause.
What to do now
Before you sign a private or broker-arranged refinance:
- Look up both the broker and their brokerage in FSRA’s registry and enforcement database
- Get every fee in writing, including brokerage, lender, legal and prepaid interest
- Always get a written breakdown of the risks and any conflicts of interest upfront
- Review your application to confirm your income, job and assets are accurate
- Have your own real estate lawyer look over all the paperwork before you sign
- Know your exit plan, such as how and when you’ll move back to a lower-cost lender
- If something feels wrong, file a complaint with FSRA
The goal isn’t to avoid brokers entirely, but to force them to prove their credentials and lay everything out on the table. As FSRA puts it, your broker “must tell you about the material risks of each mortgage option” recommended to you.
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Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors.
