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B.C. mortgage broker fined $35,000 for lack of due diligence

Borrowers' annual income was significantly overstated in mortgage applications, in one case by $298,000 and in another by $254,000.
Ksenia Ivanova must also pay investigation costs in the amount of $19,958.64.

A Vancouver mortgage broker has been fined $35,000 after it was found she had facilitated unregistered mortgage broker activities and submitted misleading borrower information.

According to a public notice posted to the BC Financial Services Authority website, Ksenia Ivanova committed multiple breaches of the Mortgage Brokers Act between January 2018 and April 2019.

Among those were failing to meet, receive information from, or take instructions from the borrowers herself; accepting the personal information of borrowers from another person for the purposes of obtaining mortgage financing on their behalf; and obtaining documents and information, including notices of assessments, general income tax and benefit returns, confirmation of employment letters, and paystubs to support the borrowers’ mortgage applications.

Jonathan Vandall with the Registrar of Mortgage Brokers said Ivanova submitted misleading borrower income information in respect of 11 mortgage applications, by submitting altered documents — including Canada Revenue Agency documents, or misleading information based on those documents.

The findings said borrowers’ annual income was significantly overstated in mortgage applications. In one case, by $298,000 and in another by $254,000.

"The amount by which the borrowers’ annual income was overstated in the mortgage applications, as supported by altered financial and income documents, was significant," the notice said.

As part of the penalties, Ivanova is not allowed to apply for registration under the act for 10 years. If and when she is registered under the act, Ivanova must have two years’ supervision.

She was also ordered to pay investigation costs in the amount of $19,958.64.

Much of the case revolved around another individual unnamed in the decision that Ivanova described as a financial advisor or an accountant. Vandall said Ivanova accepted personal and financial information of most of the borrowers from that person.

In early 2019, Ivanova’s brokerage’s manager advised her to stop taking referrals from the person and that the brokerage would be auditing her files. She was advised to conduct more due diligence.

However, Ivanova continued to accept referrals from the individual and decided to leave that brokerage and join a new one.

Ivanova acknowledged the person was not only referring her business, but also providing her with all the information and supporting documents for each file he provided to her.

“Ms. Ivanova did not question any of the information or supporting documents (the person) provided to her and simply submitted the information and documents to the lenders,” Vandall said. “Ms. Ivanova did not conduct sufficient, or any, due diligence.”

The notice said Ivanova paid the man a commission of usually 20% of her net commission in cash or gift cards.