Broker claimed he wasn't aware lending personal funds required registration
A British Columbia mortgage broker has been fined after carrying out unregistered mortgage activities, despite claiming he was unaware that loaning his own funds would require proper registration.
The BC Financial Services Authority (BCFSA) has ordered Charles Funaro, along with his companies, to pay a joint penalty of $30,000 and $3,500 for investigation costs after the BCFSA found they conducted unregistered mortgage activities.
Between 2017 and 2020, Funaro engaged in several mortgage transactions without being registered under the province's Mortgage Brokers Act (MBA), which requires individuals and companies involved in mortgage-related activities to be properly registered.
Funaro initially claimed that he was unaware that lending his own funds qualified as unregistered mortgage activity. However, the BCFSA’s investigation revealed that Funaro had been warned in 2020 about the potential need for registration but continued his activities.
The investigation uncovered that Funaro had lent money secured by mortgages on at least 34 occasions from 2017 to 2020. The majority of these transactions occurred in 2018 and 2019, with Funaro lending money on the security of 10 or more mortgages during that time.
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Funaro's companies, 0643025 B.C. Ltd. and CAD Investments Ltd., were also found to have participated in unregistered mortgage transactions.
From November 2017 to November 2020, 0643025 B.C. Ltd. was involved in three mortgage transactions, while CAD Investments Ltd. handled six transactions from March to June 2021—both without proper registration.
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While Funaro claimed he was unaware of the need to register for lending his own funds, the BCFSA made it clear that such ignorance does not excuse non-compliance.
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