B.C. regulator fines mortgage broker $66K over failure to share complete financial information
A B.C. mortgage broker has been ordered to pay nearly $66,000 to a provincial regulator for misconduct.
In a decision issued late last month and posted online last week, the BC Financial Services Authority imposed the penalty on mortgage broker John Hawkins Anderson. A previous decision finding that Anderson had committed conduct "prejudicial to the public interest" was issued in August.
The misconduct in question occurred in 2020 and involved four mortgage applications Anderson submitted that failed to disclose some of the financial liabilities of the prospective borrowers.
On two of the applications, he also failed to verify the accuracy of the borrowers' information.
Summarizing Anderson's offences in his decision on penalties, BCFSA hearing officer Andrew Pendray described the mortgage broker as telling investigators the information he omitted "didn't matter" and "wouldn't have affected anything, anyway."
"Mr. Anderson appears to have concluded that it was open to him to determine what financial liability he was required to provide to a prospective lender, and what financial liability information could be left out," Pendray's decision reads.
"That conclusion is not one that is conducive to the efficient operation of the mortgage marketplace, nor is it one that, if allowed to continue in the industry, will allow for the protection of the public as a whole. While it is true that there was not, in this case, any significant harm or financial loss to the public, the risk of such a loss occurring is, in my view, readily apparent if such an attitude on the part of a registrant were allowed to stand unchecked by the regulator."
The hearing officer concluded that Anderson's actions "created a significant risk of adverse outcomes" for both the mortgage applicants he represented – who may not have been able to afford their payments – and the mortgage lenders, who could have funded mortgages based on incorrect information.
"I find Mr. Anderson’s apparent views in this regard to be incorrect on their face, and to be contrary to the overarching goal of the mortgage regulatory system, that being the protection of the public," the decision reads. "In my view, it is clear that specific deterrence is required in order to ensure that Mr. Anderson’s views in this regard be put to rest."
To that end, Pendray determined that a fine "at the maximum end" of the BCFSA's scale would be appropriate. He ordered Anderson to pay a $50,000 penalty, which was the amount requested by investigators.
Pendray also ordered Anderson to pay for the cost of the investigation into his conduct, though the hearing officer did not grant investigators all of the costs they were seeking.
Though they had "substantial success," investigators did not prove all of the allegations they brought against Anderson, Pendray noted, adding that some of the expenses investigators had claimed were for matters that were not, ultimately, brought to a hearing.
Instead of the $18,137.05 in costs investigators were seeking, Pendray ordered Anderson to pay $15,987.05, bringing the total the broker must pay the BCFSA to $65,987.05.
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