TORONTO -- The Canadian Securities Administrators is proposing regulatory changes that would enhance rules about the risks of investing in syndicated mortgages throughout the country.

While there are many legitimate syndicated mortgage investment opportunities, in which private mortgages are sold to a group of investors to finance real estate developments, some companies or individuals offering these investments may advertise these products as fully secured or guaranteed as high return.

The CSA, the umbrella organization of the country's provincial securities regulators, is now proposing that prospectus and registration exemptions that currently apply to syndicated mortgages in certain areas of Canada should be removed.

Additionally, the CSA wants to introduce changes to certain existing prospectus exemptions to address specific concerns with syndicated mortgages, including revisions to the offering memorandum exemption to provide heightened disclosure for investors.

Under this proposal, issuers of syndicated mortgages would also be required to deliver property appraisals prepared by an independent, qualified appraiser.

A crackdown in Ontario last month put the spotlight on these products when the province's financial services regulator issued $1.1 million in fines against four parties that were involved with syndicated mortgages for real estate development projects in which Ontario-based Fortress Real Developments Inc. was a developer or development consultant.

As part of the settlement, the mortgage broker license of Vincenzo Petrozza, Fortress's chief operating officer, was revoked. Fortress itself was not subject to any of the orders.