Harold Gerstel, also known as “Harold the Jewellery Buyer,” had his mortgage broker licence recently revoked. Due to the inappropriate behaviour, the Financial Services Regulatory Authority of Ontario (FSRA) took this assertive action against him. On Monday, officials took a bold step. His decision to step down followed troubling allegations regarding his behavior as a mortgage broker that began circulating in May 2022.
The troubles for Gerstel escalated when a client publicly complained to the Toronto Star about a mortgage deal he brokered. This settlement allegedly cost the client $1.3 million and required her to sell her home. In reviewing Gerstel’s fraudulent activities, the FSRA discovered deeply troubling practices. He didn’t do reasonable and appropriate identity verification and didn’t factor processing fees into his borrowing cost calculations. On top of that, he overstated the number of lenders he purported to speak for.
It was the FSRA’s third such warning letter to Gerstel, citing repeated violations of industry best practices. Despite these warnings, Gerstel allegedly “repeatedly provided false or misleading information” on licensing applications, leading to the revocation of his licence for refusing to cooperate with the ongoing investigation.
In a phone call with CityNews, Gerstel denied any wrongdoing, asserting that he has “many satisfied customers” as a mortgage broker. These claims are a stunning reversal of the FSRA’s conclusions. Moreover, client experiences shared with us have been at odds with this — often in jarring and disappointing ways.
Elissa Sinha, director of litigation and enforcement at FSRA. She said the key is making sure that there’s integrity in the mortgage brokering industry. She concluded by stressing that consumers should expect nothing less than a reliable mortgage brokering industry. This trust starts with openness, candor and a commitment to accountability. Anything else erodes trust in the whole field and has fatal impacts.
Gerstel intends to appeal the ruling. He said, “I have 30 days to appeal so I will consult with my attorney to receive his counsel.
The court hearing in January 2023 brought home the seriousness of that climate change–fueled crisis. A judge found Gerstel liable for conspiring to defraud a sick and elderly woman into obtaining loan shark loans for overpriced and shoddy home improvements.
As this case continues to develop, it raises important questions about accountability in the mortgage industry. Yet it points to the pressing need to safeguard vulnerable consumers.
