Kelowna mortgage broker fined $30K loses appeal

A Kelowna mortgage broker who was fined $30,000 and had her licence suspended for two years has lost an appeal to get her licence back early. According to a July 23 BC Financial Services Tribunal decision, mortgage broker Jessica Labonte argued suspending her licence for two years was too harsh. Labonte argued she was at a stressful period in her life, going through a divorce and raising three children when the misconduct happened. In December 2022, the BC Financial Services Authority found that the Kelowna-based mortgage broker had on six occasions given false and misleading information to lenders in order to secure mortgages for her clients. "(Labonte) knowingly submitted mortgage applications that contained false or misleading information regarding owner occupancy and rental income, and she specifically sent applications to different lenders containing different information while knowing she was providing contrary or misleading information," the Tribunal said. The decision says the false and misleading applications were made between 2017 and 2019 when she worked for VERICO Compass Mortgage Group. One application said a client's income was higher than it was, while on other applications she stipulated that properties would be owner-occupied, to get a better deal for the buyers who planned to rent them out. "The misconduct in this case was severe, deliberate, and undermined the most fundamental and important aspects of being a mortgage broker," the Tribunal said. Labonte was also found to have stored clients' files on a hard drive she kept in a friend's garage that had been destroyed by fire. The friend also had multiple criminal charges, including possession of a controlled substance for the purpose of trafficking. In her appeal, Labonte argued she was self-represented and didn't realize that evidence regarding her mental health and separation were relevant to what penalty the Tribunal would hand out. READ MORE: BC mortgage broker who lied to regulator on the hook $83K https://infotel.ca/inhome/bc-mortgage-broker-who-lied-to-regulator-on-the-hook-83k/it106192 The Financial Services Tribunal agreed saying this evidence would have been taken into considered when handing out a penalty, however, the Tribunal said some of the information about her personal circumstances was heard during the procedures. "The fact that (Labonte) did not know that the evidence in question was relevant at the time of the proceedings and therefore failed to produce it, does not mean that it was not discoverable or could not have been discovered with reasonable diligence," the Tribunal ruled. "I acknowledge that (she) was a self-represented litigant at the time, but (she) always knew about this evidence and could have testified to it or elaborated on it, for the record shows that she had the opportunity to do so." Labonte argued no harm was done by her conduct, it was at the beginning of her career, and she was remorseful. The Tribunal noted that in the years since Labonte put forward the dodgy applications she had continued to work without any issues and was respected in the industry. READ MORE: The perils of buying Okanagan real estate during fire season https://infotel.ca/inhome/the-perils-of-buying-okanagan-real-estate-during-fire-season/it106143 Her former boss had said that while he would normally fire someone who'd done such a thing, he thought Labonte had made the mistakes because of a lack of management support and training when she was starting out. However, the appeal board didn't buy it. The appeal board said the regulator had handed out a just penalty which demonstrated that mortgage brokers who threatened the "integrity of the industry" would be held accountable and upheld the two-year suspension. To contact a reporter for this story, email Ben Bulmer mailto:bbulmer@infonews.ca  or call (250) 309-5230 or email the editor mailto:news@infonews.ca . You can also submit photos, videos or news tips to the newsroom mailto:tips@infonews.ca  and be entered to win a monthly prize draw. We welcome your comments and opinions on our stories but play nice. We won't censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in comments, email the editor in the link above. SUBSCRIBE to our awesome newsletter here https://infotel.ca/newsletter .