Toronto (September 16, 2019) – The collective ‘Victims of Syndicated Mortgage Investments’ (VOSMI) demand further investigations in the conduct of their lost syndicated mortgage investments. After, they were poorly informed about the potential risks that come with this type of investment – as they claim – the members of the collective lost millions.
Outside of the law society’s offices at Osgoode Hall in Toronto, members of the collective VOSMI took their protest to the street on September 13. The protestors lost millions of dollars while investing in syndicated mortgages, CBC reported. The investors feel mislead by their brokers and lawyers as well as let down by the provincial regulators and the Law Society of Ontario.
The VOSMI are claiming, the financial experts promised them, their investment in mortgages would be safe and strictly regulated. But, due to fine prints and commission rates, they watched their money vanish instead of receiving the promised eight percent annual return of investment. They are also alleging developers, brokers, and lawyers have targeted seniors and exploited their vulnerability since they are hardly able to stem such major financial hardship.
A majority of the protesters were engaged in the syndicated mortgages of properties managed by Fortress Real Developments, according to CBC News. The development company based in Richmond Hill is currently under investigation by the RCMP. In February 2018, the Financial Services Commission of Ontario (FSCO) has already fined the Fortress brokers with $1.1 million.
The VOSMI are blaming the provincial regulators and the Law Society of Ontario to have failed to protect them from the legal but predatory scheme. As a consequence, they demand investigations into the lawyers who were involved in syndicated mortgage investments since they claim that they withheld information about the risk evaluation of the investment and about the hidden commission rates of as high as 35 percent. They request, those lawyers who have been involved should be disbarred. Additionally, they claim the Law Society of Ontario and FSCO did not react fast enough. It took one year from the first complaints until the institutions acted.
The Law Society of Ontario explained that they are aware of the problem in a statement to CBC Toronto and that they published a notice to lawyers concerning syndicated mortgages where they highlighted lawyers’ obligations in these cases. Since the Fortress investments scandal, the province of Ontario has replaced FSCO with the Financial Services Regulatory Authority of Ontario (FSRA).
A syndicated mortgage is an investment in which two or more people get together and start investing in a single, or multiple real estate properties according to Loans Canada. This way, the mortgage is provided by multiple private lenders instead of a bank.