B.C. mortgage broker receives maximum penalty for carrying on business without registration

A B.C. mortgage broker has received the maximum penalty for conducting business while unregistered, according to the profession’s provincial regulator.

Harvinder Makkar entered a consent order agreement with the B.C. Financial Services Authority last month and a redacted version of it was published online last week.

According to the document, Makkar was registered as a submortgage broker with Centum Mortgage Solutions in January 2023, when the company shut down and terminated its brokerage registration.

“Under the current Mortgage Brokers Act, submortgage brokers must operate through a registered mortgage brokerage and under the supervision of a designated individual,” the BCFSA said in a news release about Makkar’s consent order.

“This requirement protects consumers by ensuring submortgage brokers are properly supervised, comply with regulatory requirements, and are accountable for the services they provide.”

Two days after Centum shut down, the BCFSA sent Makkar a letter informing her that she was no longer registered to conduct mortgage business in B.C., according to the consent order.

Despite this, Makkar told the BCFSA she believed she was allowed to continue conducting mortgage business through the scheduled expiration of her registration, which was in October 2023.

She ended up working beyond this date, too.

“From Jan. 23, 2023 until Dec. 6, 2023, H. Makkar continued to carry on the business of lending money secured by mortgages and holding herself out as a mortgage broker,” the consent order reads.

The document lists 10 instances in which Makkar arranged mortgages during this time, efforts that involved 13 properties and 21 borrowers, and for which she received approximately $61,000 in fees.

The consent order notes that Makkar admitted her misconduct and “fully co-operated” with the BCFSA’s investigation, including making the regulator aware of additional mortgages she had arranged, beyond the three investigators initially questioned her about.

Under the consent order, Makkar agreed to pay a $50,000 fine plus $5,000 in investigative costs to the BCFSA.

The regulator’s news release indicates that this is the maximum penalty available under the law for misconduct of this type.

“The requirement to operate only through a mortgage brokerage is not a formality; it is a fundamental safeguard for consumers,” said Jon Vandall, the BCFSA’s senior vice-president for financial professionals, in the release.

“Individuals who provide mortgage services outside the regulatory framework avoid oversight and accountability that protects the public. This case demonstrates that BCFSA will take enforcement action when individuals choose to disregard those requirements.”