B.C.’s Registrar of Mortgage brokers says he hopes hefty fines issued against a pair of B.C. men will send a message to the public about the dangers of licensed brokers “fronting” business for unlicensed partners.
In a decision issued last week, Dennis Percival Rego and Arvind Shankar were each fined $50,000 — the maximum penalty allowed under the Mortgage Brokers Act.
Rego, who was a licensed sub-mortgage broker, was accused of filing misleading and false information in a series of mortgage-related documents for a client. He was also accused of taking direction from Shankar — who was not licensed as a mortgage broker — in relation to the submitting of mortgage applications.
“Penalties of $50,000 for the parties involved reflect the seriousness of the misconduct,” registrar Chris Carter said in an interview with the CBC.
“It also sends a compelling signal to the industry that fronting unregistered activity is treated seriously and won’t be tolerated.”
Carter says the issue of fronting is of particular concern to his office, especially given B.C.’s overheated real estate market and the implications for borrowers seeking money to finance multimillion-dollar homes.
One of the registrar’s designates, Cheryl Vickers, wrote the ruling.
She said Rego knew Shankar wasn’t registered but “fronted for him in mortgage brokering activities and took direction from him in submitting mortgage applications.”
“Mr. Rego engaged in conduct that was dishonest and fraudulent. He submitted contracts of sale to prospective lenders that he knew were fraudulent. He submitted numerous mortgage applications to lenders that he knew or ought to have known were misleading and that contained varying and unverified information.”
Rego could not be reached for comment and didn’t represent himself in the disciplinary proceedings.
Shankar disputed the allegations. He says he plans to appeal.
Read the full story over at CBC News.